Media Q4 Earnings Preview - Valuations Attractive; Risk-Reward Favorable: Dolat Capital

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Dolat Capital Report

We expect a modest recovery in ad revenues aided by low-base (down15% YoY for Zee Entertainment Enterprises Ltd. and 16% for Sun Tv Network Ltd. in Q4 FY20).

Fast-moving consumer goods, paints, auto etc. we estimate to be the key sectors driving the performance.

Zee would also benefit from the conversion of pay channels to free-to-air driving ~5-6% ad revenue growth.

We estimate a modest growth in subscription revenues primarily driven by digital business.

Broadcast business subscription revenues we expect to be flattish to low-single-digit growth.

Ebitda growth to be healthy for Zee (~65%) led by lower content costs.

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