Zee Entertainment Enterprises Ltd., incorporated in 1982, is a large-cap company (with a market capitalization of Rs 23503.82 Crore) operating in the media and entertainment industry.
Key product / revenue segments of Zee Entertainment Enterprises Ltd. they include advertising revenue, subscription revenue, television content, broadcast revenue, other operating income, and commissions for the year ended March 31, 2021.
For the quarter ended 31-03-2022, the company recorded a consolidated total revenue of Rs 2,361.17 crore, 10.83% more than the total revenue of the last quarter of Rs 2,130.44 crore. rupees and 18.99% more than last year. The company reported a net profit after tax of Rs 181.95 crore in the last quarter.
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Justification of the investment
Zee’s market share recovery was uneven this year, with a further decline in network share this quarter to 17.1%. His inability to gain market share despite having released more than 90 shows in the last year is worrisome. Zee5 continued to see traction with higher MAU and DAU. However, higher investments increased EBITDA losses. Management has also stressed that investments will remain high, which means short-term pressure on margins. Advertising revenue recovery is also likely to be more gradual, as advertisers reduce their spending in a high inflation scenario. Subscriber revenue growth is also still uncertain, with no visibility on the lifting of the price embargo. While management remains positive about the original 8-9 month timetable for the merger, the lack of stock market approval so far leads us to conclude that a delay is likely. Given these short-term challenges for the company, the brokerage believes that any short-term trigger of the actions is limited. That said, long-term history, with fusion synergies, is likely to keep Zee ahead of its competitors.
Promoter / FII Holdings
The promoters had a 3.99% stake in the company on March 31, 2022, while the IFIs owned 47.86% and the DIIs 24.18%.
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