Zee Entertainment Q1 Review - Reverse ‘U-Turn’; A Normal: Dolat Capital

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Dolat Capital Report

Zee Entertainment Enterprises Ltd.’s Q1 FY22 was weak with 22.7% ad revenue decline (TV18 4%) versus Q1 FY20 led by market share loss and Covid-19 impact.

Reported/Adjusted Ebitda margin declined to 19.4/20.9% versus 34.1% in Q1 FY20.

Zee’s management had guided weak outlook in Q3 FY21 (price declined by 14% next day), reversed the same in Q4 FY21 (stock up 12% in a week) with robust guidance on advertising (double-digit versus FY20), subscription, margin (25% up in FY22), free cash flow (50% plus of profit after tax) and no investments in Sugarbox.

In Q1 FY22, commentary is again back to square-one viz. similar to Q3 FY21.

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