Zee Entertainment Enterprises Ltd. share price target

Zee Entertainment (Zee), along with other group companies, witnessed a sharp correction (~27%) in their share price after an article (link) by the media group The Wire alleged that Essel Group were linked to an entity named Nityank Infra that is being investigated by Serious Fraud Investigation Office (SFIO) for deposits of | 3000 crore during demonetisation. With further concerns over group level debt and pledged shares, the shares fell sharply. Through a conference call and stock exchange announcement (link), the company has categorically denied any...

The consolidated revenue grew by 17.9 percent on year-on-year (YoY) basis at Rs 2,166.77 crore, driven by ad revenue and subscription revenue growth. Consolidated ad revenue grew by 21.7 percent at Rs 1,462.6 crore and subscription revenue grew by 23.3 percent at Rs 618.5 crore. Strong traction in domestic ad revenues and subscription revenue growth supported...

At 27/24x FY19/20E EPS, Zee's valuations look reasonable given its superior growth and execution. Reiterate BUY with TP of Rs 512 @ 25x Dec-20E EPS. Zee delivered yet another strong quarter on all the operating parameters viz. ad, subscription and margins. This is despite ongoing investments in digital (ZEE5). In 3QFY19, revenue/EBITDA/APAT grew by 18/27/44% YoY. Even in 9MFY19, revenue/EBITDA/APAT grew by healthy 19/27/31%.

ICICI Securities Ltd | Retail Equity Research The key highlight for Zee Entertainment's (Zee) Q3FY19 performance was the strong performance on the domestic subscription front (~28.6% YoY growth vs. estimate of ~18%) and domestic advertisement growth of ~20.6% YoY (even on a high base of 30.2% growth in Q3FY18). International ad grew ~40% YoY. We note that while subscription revenues were led by catch up revenues from deal closures and better monetisation of phase III markets, the domestic ad...

revenue grew 18% YoY to INR21.7b (in-line), driven by robust ad/subscription growth. Domestic ad revenue increased 21% YoY, led by contribution from ZEE5 and a higher network viewership share. Domestic subscription revenue grew 29% YoY, led by a favorable base and monetization of phase-III subscribers. EBITDA, thus, grew 27% YoY to INR7.5b (5% beat), with the margin expanding 250bp YoY to 34.8%. This, coupled with higher other income and fair value gains, led to PAT growth of 50% YoY to INR5.6b (+26% YoY adjusted for fair value gains). (1) ZEE expects to deliver better-than-TV industry ad revenue growth and low-teens subscription revenue growth in FY20. (2) FY20 margins are guided at 30%+, despite investments in ZEE5. (3) The company is confident of announcing the buyer for promoter stake by Mar/Apr19 (as guided earlier).

ZEE delivered a robust performance in Q3, outperforming on the advertisement revenue front (+21.7% yoy) as well as in domestic subscription revenue (+29% yoy). The solid 27% yoy increase in EBITDA was largely in line with our ahead-of-consensus estimate. While maintaining our ahead-of-the-street estimates, we are incorporating 20%/15% ad growth for FY19/20E. With 31 originals, content launches on ZEE5 is behind management...

Entertainment Limited (ZEEL) to get its perspective on 1) value-maximisation by bringing-in a strategic investor, 2) progress in scaling-up of ZEE5, 3) outlook on its core business, 4) investments around movies and music business and 5) targeted margin band. Ambition to become leading global mediatech player: ZEEL's management highlighted that association with a large strategic partner would transform the company from a pure...

We maintain BUY with revised TP of Rs 487 We downgrade Zee Entertainment (Zees) target multiple from 30x to 25x Sep-20E EPS to factor in the divestment by promoters of upto 50% of their holding to a strategic partner by Apr19. Promoters even remain open for complete exit. Promoters hold 41.6% (59% pledged) amounting to ~$2.4bn at CMP. Potential exit by capable and efficient management and the resultant business disruption in the interim during transaction closure and management change is key concern, especially when industry is witnessing structural shifts.

Zee entertainment (Zee) informed the stock exchanges about the promoter group's intent to sell/divest up to 50% of their equity stake in the company to a strategic partner. Zee aspires to converge into a tech/media tech company to adapt to a changing global media landscape. Consequently, the company cited the need for superior tech support and geographical reach as the major reason to opt for such a proposed decision. The management also indicated they have received interest from few interested parties in the last six months (without divulging any...

ZEEL is India's #1 TV network for non-sports entertainment with a 20% share of all-India viewership in 2QFY19 (+160bps YoY). In the last 6years, Zee has delivered 18% CAGR in domestic ad revenues vs. 12% CAGR in TV ad spends. Zee has now embarked on a transformational journey with the launch of the Zee5 video platform; it is already #1 in original...