Zee Entertainment Enterprises Ltd. share price target

Puneet Goenka to continue as MD&CEO; for 5 years with promoter family having an option to increase stake from 4% to 20%. ZEEL's proposed merger with SPNI is a win-win situation, as it will likely 1) result in material revenue synergies (~6-10% due to better scale & reach) 2) drive growth, as merged entity will have cash ammunition of US$1.7bn to fund digital ambitions and 3) absolve uncertainty surrounding board room...

About the stock: Zee Entertainment (Zee) is one of the largest listed media The Goenka's (current Zee promoter) stake shall remain at 4% in the combined entity, will incremental 2% to be given by SPNI for non-compete....

ZEE5 is showing improving traction and can lead to re-rating over time. ~18% in equity have called for an EGM to reconstitute the current board. current MD&CEO.; Further, institutional investors have also suggested inducting six new names into the board. While the existing management had taken steps to improve corporate governance & disclosure practices, given...

Revenues at | 1,775 crore were up 35.3 YoY, down ~10% QoQ, with ad revenues up 120% YoY to | 927 crore, on a depressed base of Q1FY21 but down 20% QoQ. Overall subscription revenues grew 2% YoY to | 813 crore,...

Network share drops to 17% due to disruption caused by lockdown and soft performance in markets like Hindi, Marathi and Tamil. We cut our EPS estimates by 20%/9% for FY22/FY23 respectively as recovery in domestic ad-revenues has been delayed (ad-revenues in FY22 can more or less be a replica of FY20 versus earlier expectation of double digit growth). Delayed recovery is likely to drag margins given the ongoing investment drive in digital, movies and linear TV (Hindi, Marathi and Tamil content to be...

We revise down our EBITDA/PAT estimate by 12% for both FY22/FY23 for the second straight quarter (after last quarter's 57% cut), factoring in FY23 EBITDA at 16% above FY20 levels as weak recovery, coupled with an intensifying content spend, should hurt earnings. Maintain Neutral. Consolidated revenues grew 35% YoY to INR17.7b (-10% QoQ; 5% beat), as ad revenue was up 2.2x YoY, driven by the lower impact of the second COVID wave v/s the first wave. Compared with pre-COVID levels (1QFY20), domestic ad revenues were lower by 22.7%....

Due to uncertainties in the economic climate, management decided to scale down its investments in Sugarbox for the foreseeable future. We remain optimistic on the stock, as company expects double digit growth in ads business, while OTT platform should support strong growth in the subscription business. We reiterate our BUY rating on the stock with rolled forward target price of Rs. 233 based on 13x FY23 adj. EPS. Ads and subscription revenue supports topline Consolidated revenue rose 0.8% YoY to Rs. 1,966cr, with Advertisement revenue...

Ad recovery to be function of pandemic tail The management expects ad revenues to witness double digit growth (over FY20 levels) provided the Covid second wave tapers soon. The company also indicated there would be some weakness in ad revenues in Q1 due to second wave and original programming for broadcasting business is remaining only for a few days for both Hindi as well as regional channels. We bake ~23% CAGR in ad revenues in FY21-23E on a depressed base of FY21 wherein ad revenues declined 20%. The company expects...

We have revised down our FY22E/FY23E EBITDA/PAT by ~7%/5% on reduced margin guidance due to increased content investment in both broadcasting and the digital business. Lower investment guidance towards Sugarbox is a key positive. Maintain Neutral....