Zee Entertainment Enterprises Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Revenues came in at | 1725.3 crore (vs. our estimate of | 1680.4 crore). The topline beat was led by superior domestic advertisement revenues, which grew 23.9% YoY, higher than our estimate of 20% YoY growth. Adjusting for sports (now exited) and RBNL channels, domestic ad revenues growth was 21.5% YoY. Domestic subscription revenues came in at | 452.1 crore (down 0.7% YoY), slightly ahead of our estimate of | 446.4 crore. Adjusted for sale of the sports business,...

Punjabi), increase in original programming hours, launch costs related with Zee5 launch led to some pressure on margins, which were about 310 bps/140 bps down qoq/yoy at 29.3%. In Q4, Zee gained market share on Hindi GEC front (#1 non sport player with a market share of...

Reiterate Neutral with TP of Rs 620 @ 32x FY20E EPS. Zee Entertainment (Zee) reported revenue of 21% YoY (like-to-like ~18.5%). This was led by healthy advertising revenue growth of 25% (like-to-like ~21.5%). Subscription revenue too grew by 17.4% YoY and 8.9% QoQ. EBITDA growth was muted at 8% YoY (like-to-like ~6%) owing to higher content costs and S&M; spends on digital platform ZEE5 launch.

Robust ad revenue drives EBITDA: Ex-sports revenue grew 21% YoY to INR17.3b (5% beat), led by robust ad growth (+24% YoY to INR10.5b). Subscription revenue rose 14% YoY to INR5.5b. However, a 44% surge in SGA cost (launch of Z5) limited EBITDA growth to 8% YoY (INR5.1b, 17% beat). Consol. revenue/EBITDA grew 13%/8% YoY, while consol. margin shrunk 135bp YoY to 29.3%. Adj. PAT fell 42% YoY to INR2.3b (38% beat), led by higher taxes. Domestic ad revenue (excl. sports, RBNL and IWPL) jumped 22% YoY, led by healthy ad spend across categories. Domestic...

Zee Entertainment surprised positively, with 3% beat on revenue and 9% on EBITDA. The beat was driven by higher revenue as costs were in-line with estimates. PAT was impacted by higher tax outgo. Like-to-like domestic ad revenue grew at a healthy rate of 21.5% yoy. Domestic subscription revenue was 6% ahead of estimate while in FY18 growth of 12% was lower than expectation due to delayed monetisation in phase-III amid ongoing uncertainty around the implementation of TRAI's tariff order. spends, increased programming hours and market share gains. These factors are expected to aid Zee's outperformance on Ad growth vs. industry....

Consolidated sales grew by healthy 12.1% YoY in Q3FY18 led by robust 25.8% YoY growth in advertisement revenue. Domestic subscription growth (adjusted for sports business) stood at 7.5% YoY due...

ZEE5 likely to ride on regional content: Though the OTT sphere looks crowded with more than 40 OTT players (versus 20 in 2015) in India, the OTT segment in India is expected to report a CAGR of 25% over 2016-2020. On the subscribers' front, digital-only customers are expected to increase to 4 million in 2020 from 1 million-1.5 million subscribers now. It is...

Zee Entertainment (ZEE) has launched its digital platform ZEE5, with 8-9 original titles across genre and languages to start with. It targets to subsequently come up with six original titles every month. Viewers can subscribe to this service at a promotional offer price of INR99/month ??? at ~50% discount to Hotstar's pricing. We believe the incremental cost toward ZEE5 could be INR500-700m, implying an 80-100bp impact on the EBITDA margin. Despite this, we believe it can improve the EBITDA margin by 200bp over FY18-20, led by healthy operating leverage. We assign 35x P/E on Dec'19 EEPS of INR20 to arrive at a TP of INR705. Maintain Buy

We recently met with Mr. Punit Goenka, MD & CEO, ZEEL, and come back enthused and confident on Company's growth strategy. As ZEEL's core TV business goes from strength to strength, we believe, it is well placed to scale up its Digital offering under the refreshed Z5' platform.

Zee Entertainment Enterprises Ltd.'s net profit in the quarter ended December failed to meet market estimates as advertisers cut spending. Zee Entertainment Enterprises reported a 28 per cent rise in consolidated net at Rs 321.72 crore...