zee entertainment enterprises shares: Zee Entertainment Enterprises shares rise 3% as firm swings back to black in Q4

Shares of Zee Entertainment Enterprises rose nearly 3% to Rs 144.4 in Tuesday’s trade on BSE after the firm reported a profit of Rs 13 crore in the March quarter of FY24, after reporting a loss of Rs 196 crore in the year-ago period. Moreover, the company’s shares closed over 4% higher in a special trading session conducted on Saturday.

However, sequentially the March quarter of FY24 remained muted. The company has reported a profit of Rs 58.5 crore in Q3 FY24.

The company reported a total income of Rs 2,185 crore, up from Rs 2,126 crore during the same period a year ago. Its advertising revenue stood at Rs 1,110 crore as against Rs 1,006 crore in Q4 FY23.

For the full year of FY24, the broadcaster’s profit stood at Rs 141.4 crore crore as against Rs 47.8 crore in FY23.

Revenue from its streaming platform Zee5 improved marginally in Q4 FY24 to Rs 237 crore from Rs 220 crore during the same period a year ago. In FY24, the over-the-top (OTT) platform’s revenue increased to Rs 919.5 crore from Rs 741 crore in FY23.Here’s how brokerages view the results:Goldman Sachs
The global brokerage firm has a ‘neutral’ view on the stock with a target price cut down to Rs 167.The partial recovery in revenues was appreciable however, margins remained subdued coupled with a weak EBITDA margin profile at 9.7% for the fourth quarter. Goldman has cut its fY25-27 revenue/EBITDA estimate forecasts by 5%-8%/30%-37%.

Nuvama has upgraded the stock to ‘buy’ from an earlier ‘reduce’ with a revised target of Rs 180.

Zee Entertainment posted Q4FY24 revenue/EBITDA (up 2.7%/38.5% YoY) ahead of Nuvama’s estimate. Overall, the brokerage increased FY25E/26E revenue by 1.4%/2.6% on the back of improving outlook for FMCG advertisers, but cut EPS by 19%/6% as ZEE is transitioning towards a more focused structure, entailing high one-time costs in FY25.

Emkay Global
Emkay has maintained a ‘reduce’ rating on the stock with an unchanged target price of Rs 150.

Brokerage firm Emkay Global said that it is building in some recovery on the advertising front for ZEE (7% growth in FY25E/26E) aided by a lower base and persistent recovery in overall ad spending. Subscription revenues should see an uptick due to price hikes. Margins should also improve on account of multiple interventions, though Emkay reiterated that a significant re-rating should happen in case of a new buyer/partner. Any unfavorable decision in legal cases the company is involved in could be a key risk.

JM Financial
JM Financial upgraded ZEEL with a ‘buy’ rating with a revised target price of Rs 170.

“We take a more conservative stance given a tough competitive landscape. We build 5.8%/6.3% revenue growth for FY25/26E, lower than 6.6% growth in FY24. We also model a more gradual recovery in margins, estimating 17.5% EBITDA margins by FY26E (below the lower end of guide). This drives 10-20% cuts to our FY25- 26E EPS. Sharp correction in the stock (-25% over past 3 months) however prices in most negatives in our view,” it said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)


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