Moneycontrol PRO
UPCOMING EVENT:Watch leaders discuss the biggest issue of our times at the Sustainability 100+ Summit. Register now!

Buy Zee Entertainment Enterprises; target of Rs 430: Emkay Global Financial

Emkay Global Financial is bullish on Zee Entertainment Enterprises has recommended buy rating on the stock with a target price of Rs 430 in its research report dated September 23, 2021.

September 23, 2021 / 01:31 PM IST
HDFC Securities research report's outlook and valuations:  500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar."" title="HDFC Securities research report's outlook and valuations:  "The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar."" width="100%" height="auto" >

HDFC Securities research report's outlook and valuations:  "The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar."

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Emkay Global Financial's report on Zee Entertainment Enterprises


Zee and Sony Pictures Networks India (SPNI) have entered into a non-binding term sheet (with a 90-day exclusivity period) for the merger of the two companies. The deal should address investor concerns, and fill the content gaps each of them are currently having. Combined entity is valued at Rs502bn (incl. Rs116bn cash from SPNI) based on merger-terms. Zee shareholders would own 49.1% of the merge-co, including a 2% stake transfer by SPNI to Essel Group towards non-compete; Sony will have control over the board. Essel Group will maintain its ~4% stake post-merger, with an option to raise it up to 20%. The merger will result in scale (USD2bn revenues), leadership (~25% revenue share), complementary assets, and an USD1.8bn cash pile to ramp up growth. As a result, we turn constructive on Zee with the assumption of successful synergies accruing on both revenue and cost fronts.



Outlook


We upgrade to Buy from Hold and raise our Sept'22E TP to Rs430 (11x Sept'23E pro-forma broadcasting EBITDA) from Rs205.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Sep 23, 2021 01:31 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark