Zee Entertainment Enterprises Ltd. share price target

ZEE is one of the largest media companies in India

Advertising revenues back on track, while Zee 5 is gaining traction Zee's Q3 FY21 numbers were broadly in line with expectations in the festive third quarter of FY21. Advertising revenues grew by 5.8% yoy and 44% qoq as economy revived and the effect of pandemic faded off in the latter half of the quarter. Subscription revenues grew by 18% yoy and 5.2% qoq as Zee 5 business gained momentum. The core subscription revenues would have remained flattish on uncertainty related with NTO2.0. However, there was a one-off syndication revenue element of 5.51 bn on sale of certain content inventory in international business. Excluding this, total revenues grew by 6.3% yoy. EBITDA margins adjusted for this revenue stream...

We revise our EBITDA estimate by 9%/5% for FY21/FY22E, building in faster recovery, but high content investment would keep EBITDA margins lower at 27% (v/s >30% historically) in FY22E. Maintain Neutral....

Story in Charts ZEEL's viewership trend & key financial metrics ........................ 4 Story in Charts Pay TV & OTT evolution trends ................................................. 5 ZEEL Reinventing with changing times .............................................................. 6 Investment Argument............................................................................................. 7 ZEEL 4.0: A new transformational journey ......................................................... 7 TV ad-ex traction to slow as digital medium evolves .......................................... 9 ZEEL has strong presence in GEC & movie genres ........................................ 11 NTO 1.0 was a key catalyst in aiding subscription revenue ............................. 18...

Steady growth in overall Subscription revenue coupled with recovery from Advertising should support topline growth in the near-term. We remain optimistic of Zee's future growth prospects and reiterate our BUY with target price of Rs. 245 based on 14.5x adj. EPS. Ad spends push up topline, PAT improves sequentially Q2FY21 revenue grew 31.3% QoQ to Rs. 1,723cr (-18.8% YoY) primarily on account of growth strong recovery seen in Advertising revenue at Rs. 903cr (+114% QoQ), as Ad spends see gradual improvement. Subscription revenue also went up 7.5% QoQ...

One-off write-off along with losing market leadership in key markets of Marathi and Bangla languages is a concern. While ad volumes improved QoQ owing to fresh content, ad realisation remains low. Full recovery in ad pricing ahead of festive season will be the key. Potential implementation of NTO 2.0 and impact ahead also remains unknown. We will turn buyers once ad recovery, improved cash flows & related parties mess eases. We maintain...

advertising revenues fell by 26.3% yoy. Subscription revenues grew by 10.6% yoy (2% on like to like basis). Ad revenues however more than doubled sequentially on a very low base. Subs revenues This impacted the EBITDA negatively. Margins as a result of which slipped down to 18.2%; while adjusted margins would have reached 23%. The company lost some viewership share in Q2 in...

Zee's Q2FY21 operating performance was in-line with revenue / EBITDA / APAT decline of 19/43/51% YoY. As company promised upon improvement in 5Gs (governance, granularity, growth, goodwill, and gusto) in Q1FY21, the sudden pop-up of failure of related party viz. Siti Networks to meets banks obligations was a key-negative surprise that wasn't called out by company. Zee provided for balance outstanding receivables from Siti of Rs 0.8bn (Rs 1.2bn provided earlier). It also provided Rs 0.97bn (Rs 2.07bn o/s)...

We upgrade our rating on the stock to BUY with a revised target price of Rs. 245 based on 15x FY22E Adj. EPS Topline falters on lower Ad spends, PAT sees a massive fall Q1FY21 revenues fell by 34.7% YoY to Rs. 1,312cr, impacted by significant decline in advertising revenues (-64.5% YoY to Rs. 421cr) as the business took a hit during the months of March and April owing to pandemic. On the contrary, subscription revenues grew by 5% YoY to Rs.744cr, aided by surge in online viewers. Revenues from other sales and services rose by 30.3% YoY to Rs. 147cr, backed by sale of movie rights to...