Neutral Zee Entertainment; target of Rs 130: Motilal Oswal

Neutral

Motilal Oswal's research report on Zee Entertainment

Zee Entertainment (Zee)’s revenue continued the declining trend with a 3% YoY dip (-1% QoQ; 5% miss) due to continued softness in domestic advertising revenue (-11% YoY) and lower revenue from other sales and services (-57% YoY). However, Zee’s strong control over costs and a further reduction in Zee5 losses led to a 1%/67% QoQ jump in EBITDA/adj. PAT (6%/30% beat). Management indicated that advertising revenue pick-up in Sep’24 could not be sustained as the boost from the festive season was offset by a broad-based consumption slowdown, which led to lower ad spends from FMCG companies.

Outlook

We reiterate our Neutral rating with a TP of INR130 (based on 12x FY27E P/E).

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