Anand Rathi is bullish on Zee Entertainment has recommended buy rating on the stock with a target price of Rs 220 in its research report dated August 19, 2020.
Anand Rathi 's research report on Zee Entertainment
Pulled down by a 65% y/y fall in ad revenue to `4.21bn largely due to the pandemic and market-share loss (Q1 FY21 market share: 15.8%, 18.3% the quarter prior) in certain markets, Zee Entertainment’s revenue plunged 34.7% y/y to `13.12bn. Its subscription revenue grew 5% y/y to `7.44bn. EBITDA declined 67% y/y to `2.2bn. The reported margin was 16.8%, vs. 32.9% a year back. No fresh episodes of existing shows were produced in the first two months, leading to a drop in programming cost. This was partially offset by content shot at homes and purchase of licensed content for the linear and digital businesses. Besides, amortisation cost of movies and digital shows continues. At the ruling market price, the risk-reward is favourable.
Outlook
We maintain our Buy rating, with an unchanged target price of `220.
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