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Buy Zee News, target of Rs 37: Angel Broking
Angel Broking has recommended a buy rating on Zee News with a target price of Rs 37. ZNL's current Earnings and Cash flows do not capture full potential of its new businesses (these are under heavy investment mode), which we believe are likely to substantially bolster Profitability post attaining maturity.
Angel Broking has recommended a buy rating on Zee News with a target price of Rs 37 in its March 16, 2009 research report.
"We have valued ZNL on DCF Methodology to capture long-term value creation from the Regional markets and the growing Subscription opportunity, particularly for Broadcasters. Moreover, ZNL's current Earnings and Cash flows do not capture full potential of its new businesses (these are under heavy investment mode), which we believe are likely to substantially bolster Profitability post attaining maturity."
"Assuming WACC of 12.3% and Terminal growth rate of 4%, our target price based on FY2010 estimates works out to Rs 37 at which the stock would trade at a P/E of 14.9x and EV/EBITDA of 8.1x, which is significantly below its historical average P/E band of 25-30x. We initiate coverage on the stock, with a buy recommendation implying potential upside of 28% from current levels," says Angel Broking's research report.
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