Zee Entertainment Enterprises registered a 148% jump in net profit to Rs 590 crore in the September quarter. (Image: Reuters)
Morgan Stanley is bullish on Zee Entertainment Enterprises, after the company posted a whopping 148% year-on-year jump in net profit to Rs 590 crore in the July-September quarter. The global firm maintained overweight rating on the shares of Zee Entertainment Enterprises with a target price of Rs 610. Zee Entertainment shares were trading at Rs 532, up by more than 1.3% since yesterday’s close. Morgan Stanley’s target price implies an upside of more than 14.5% from the current market prices. Notably, the previous target was Rs 524. According to the research firm, “Valuation at 18x FY19E EV/EBITDA is undemanding.”
The company has earned an exceptional gain of Rs 134.61 crore as the Group has concluded closure of its second phase of transaction for disposal of sports broadcasting business to Sony Pictures Networks India. Notably the shares have underperformed the BSE Sensex with returns of 16% since January. In comparison Sensex is up by more than 22% in the year so far. Earlier this month, Macquarie had set a target price of Rs 615. Macquarie sees a 21.4% CAGR in the Earnings Per Share of Zee Entertainment over FY 17-20.
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Zee Entertainment is a large-cap stock in which Vanguard Fund is a prominent investor. As on 30th June 2017, Vanguard Fund had $4.4 trillion assets under management. Notably, Vanguard International Growth Fund has increased its stake to 1.56% in the September quarter from 1.45% stake at the end of Apr-Jun quarter, data filed by Zee Enterprises with the exchanges showed.
ZEEL has three sources of revenue – advertising, subscription and other sales and services. Other sales and services include revenues from movie production business, content syndication, music label and commission on sales amongst others.
“The other income for the quarter includes notional gain of Rs 160.9 crore on re-measurement of previously held equity interests in India Webportal Private Limited (IWPL) and Fly By Wire International Private Limited to its acquisition-date fair value,” Zee Entertainment said in a statement yesterday.
