Zee Entertainment Enterprises Share Price: Shares of ZEE Entertainment Enterprises fell up to 4 per cent in intraday trading at Rs 280.15 on Thursday. This fall in the shares of the company has come due to weak December quarter results.
ZEE Entertainment Enterprises had released its December quarter results on February 2. The company said that its consolidated net profit for the third quarter stood at Rs 298.98 crore, lower than Rs 398.01 crore reported in the corresponding quarter of the previous financial year. Apart from this, the company’s total income also declined to Rs 2,130.44 crore in the December quarter from Rs 2,756.93 crore in the corresponding quarter of the previous financial year.
The company says that it is not correct to compare the results of the December quarter with the figures of the previous year because during this period it had to face many hurdles due to Corona epidemic. The company’s advertising revenue for the December quarter stood at Rs 1,260.80 crore, as against Rs 1,302.03 crore in the year-ago quarter. The company’s subscription revenue for the December quarter stood at Rs 790.15 crore, as against Rs 841.91 crore in the same quarter last year.
After the December quarter results, what are the views of the brokerage firms on the company and the stock, let us know:
Motilal Oswal
Reduction in advertising spend by FMCG companies and rising RM prices across sectors pose risks to improving ad revenue growth. With the launch of new content and continued investments in the OTT segment, its market share is expected to improve and will be a better indicator of performance for ZEE5. We have revised our EBITDA and PAT estimates for FY23E/FY24E to reduce them marginally (3-4 per cent).
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We value ZEE at 25 times the Earnings of the Share (EPS) for FY24E and give a target price of Rs 410 for the stock, which is marginally lower than the earlier target price of Rs 425. We retain our “BUY” rating for the stock.
Prabhudas Lilladher
There has been a decline in ZEE’s profits and advertising revenue. The reduction in advertising spending by FMCG companies was one of the main reasons behind the decline in advertising revenue. In addition, the decline in network share has also reduced advertising revenue. However, if the company continues to invest in content, we expect a gradual improvement in the viewership share. Our FY23/FY24 EPS estimates remain broad and we maintain a BUY rating on ZEEL with a target price of Rs 413
Elara Capital
ZEE stock is currently trading at 20 times FY23E earnings and 17.3x FY24E earnings, which is cheap in our opinion. However, a rerating of the stock will take place only after its merger with Sony is completed and the two together strategize digitally and go into the market. We reiterate our “BUY” rating with a target price of Rs 450 for the stock based on 20 times One-Year Forward P/E.
The research firm has maintained a “BUY” rating on the company and has given a target price of Rs 350 for the stock. The research firm says that the completion of the merger with Sony is important. Apart from approvals from NCLT and elsewhere, it needs to be seen how the major shareholders vote for it.
The brokerage house has maintained a “BUY” rating for the stock with a target price of Rs 427. The brokerage says that the company’s revenue has been in line with the estimates. Progress is also being made towards the merger of Zee-Sony. However, litigation with a large minority shareholder can increase the risk.
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