Shares of Zee Entertainment Enterprises Ltd (ZEEL) on March 20 jumped up to 6% after brokerage firm CLSA said it sees the stock price doubling in next 12-24 months.
The foreign brokerage believes advertising revenue-led growth may trigger rerating on the counter, as it suggested a target price of Rs 170.
ZEE's EBITDA margin has widened by 9 per cent from lows and even after assuming 6 per cent year-on-year (YoY) ad growth, ZEE may deliver 22-23 per cent growth in EBITDA and profit after tax in FY26-27 compounded annually, CNBC-TV18 reported CLSA as saying.
On March 20, Zee Entertainment shares on BSE rose 6% to trade at Rs 106.84 apiece before paring gains to trade at Rs 102.77 apiece.
The brokerage expects the stock to double over the next 12-24 months as its market cap-to-sales ratio of 1x is at a 60% to 80% discount to the Reliance-Disney JV and Sun TV.
Zee is India's No 2 TV network and is ramping up OTT via Zee5 platform, it said.
CLSA said ZEEL stock is at "rock bottom" 8x PE.
In January 2024, Sony had pulled out from the proposed $10.5-billion merger with ZEE Entertainment Enterprises Ltd citing failure to meet certain “closing conditions” by the Indian firm, which led to massive fall in the ZEEL stock.
ZEEL and Sony had agreed to merge on December 22, 2021.
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