Zee Entertainment Enterprises Ltd. share price target

Zee Entertainment Enterprises Ltd.'s Q2FY18 result was a mixed bag. The company reported 6.7% YoY de-growth in sales as subscription revenue declined for second consecutive quarter. EBITDA increased by 17.2% YoY on account of lower operating cost while sharp surge in other income and exceptional gain due to closure of second phase of transaction of sale of sports business to Sony Pictures boosted PAT growth at 147.8% YoY.

Furthermore, market share will receive a traction from higher spends coming on the movie basket (mainly Hindi and Marathi) by Zee. Additionally Zee's acquisition of the 9X music channels will consolidate from Q4 and add incremental revenues to the ad...

Zee is trading at 31/27x FY19/20E EPS. Valuations are rich but sustainable given Zee's focused strategy, superior execution, constant investments and profitable growth. BUY with TP of Rs 575 @ 32x Sep19E EPS. Zee Entertainment (Zee), a leading player in the Indian entertainment space reported modest operating performance owing to GST headwind. Like-to-like revenue grew by 6.6% YoY to Rs 15.8bn (excluding hived off sports business in 4QFY17); EBITDA declined by 3% to Rs 4.9bn.

ICICI Securities Ltd | Retail Equity Research Revenues came in at | 1582.1 crore vs. our estimate of | 1585.9 crore. Advertisement revenues saw 2.9% YoY growth to | 986.7 crore. Adjusting for sports (now exited) & RBNL, domestic ad revenues grew 5.8% YoY. International ad revenues were down 19.9%. Subscription revenue was at | 501.4 crore, down 14% YoY (domestic subscription declined 13.5% while international de-grew 16.1% YoY) mainly due to absence of sports business & weak international subscription...

Ad recovery in sight; subscription growth stable Ex-sports revenue up 7%, EBITDA flat: Ex-sports revenue rose 7% YoY, led by domestic ad and subscription revenue. Consol. revenue fell 7% YoY to INR15.8b (in-line). Consol. EBITDA stood at INR4.9b (flat YoY, 4% beat) with a 31% margin (+210bp YoY), despite lower revenues, led by 25% YoY savings in content cost. PAT surged 148% to INR5.9b (est. of INR3b). PAT, after adjusting for INR1.3b exceptional gains from sports, INR1.6b other income from equity revaluation and reversal of INR81m interest provision, rose 21% YoY to INR2.9b (7% miss)....

Zee has acquired 9X Media's six music channels for INR1.6b (1x FY17 sales). 9X Media holds ~26% share in the music ad market. The acquisition allows Zee to widen its TV portfolio and also provides channels to market its own music/movie production. We maintain our Buy recommendation for Zee, with a TP of INR630. Has acquired 9X Media's six music channels for INR1.6b in cash Zee announced the acquisition of 9X Media's six music channels for INR1.6b, which will be paid in cash. These six channels across four languages 9XM (Latest...

ZEELs Q1 domestic ad revenue grew ~7%, despite sluggish growth in June (ad slowdown due to GST-driven destocking). While continued slower ad spend in July may restrict Q2 ad growth as well, we expect GST implementation to aid medium-term ad spends (for industry in general), given possible reinvestme..

Revenue increased by 0.81% to Rs. 1540.25 Cr in Q1FY18 when compared to the previous quarter. Revenue increased by 0.81% to Rs. 1540.25 Cr in Q1FY18 when compared to the previous quarter.

Zee Entertainment Enterprises Ltd.'s Q1FY18 result was largely inline with our expectations. The company reported 2% YoY degrowth in sales primarily led by lower subscription revenue. EBITDA increased by 26.8% YoY on account of lower operating cost while sharp surge in other income supported PAT growth at 15.8% YoY.