Though Zee saw superior performance over FY13-19, such execution would be difficult to replicate, given the altered industry dynamics/competitive scenario.
Near-term performance is likely to worsen due to such interventions, before Company sees any improvement.
Story continues below Advertisement Remove AdOutlookWe upgrade Zee to REDUCE after a sharp ~24% correction since our last report and limited downside from current levels, but maintain a negative stance.
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Zee Entertainment - 07052024 - emkay
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Emkay Global Financial's research report on Zee Entertainment
In the aftermath of Zee’s merger breakoff with Sony, the Management and Board of the company have embarked on a comprehensive plan to help regain its lost glory, and announced multiple initiatives. Though Zee saw superior performance over FY13-19, such execution would be difficult to replicate, given the altered industry dynamics/competitive scenario. Near-term performance is likely to worsen due to such interventions, before Company sees any improvement. Ongoing legal cases only add to its woes and, we believe, could derail current plans. While valuations are favorable, overall re-rating is likely to happen only if a new partner/buyer surfaces – Zee’s decision to withdraw the merger implementation application filed before the NCLT could possibly be a precursor to this. We cut FY25-26E EBITDA by 10-12%, building in slower recovery.
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Outlook
We upgrade Zee to REDUCE after a sharp ~24% correction since our last report and limited downside from current levels, but maintain a negative stance. We trim our TP to Rs150/sh (8x Mar-26E Broadcasting EBITDA).
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Zee Entertainment - 07052024 - emkay
