Buy Zee Media Corporation; target of Rs 38: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Zee Media Corporation

ZMCL reported topline growth of 22.7% YoY to Rs1,942.2mn led by strong performance across national & regional channels aided by election tailwind and delayed festivities. In the national bouquet, Zee News witnessed a yield increase of ~3% QoQ while Zee Business' market share during stock market hours increased to 35.5% in 3QFY19. Within the regional bouquet, Zee MPCG and Zee Rajasthan witnessed strong traction due to state elections. EBITDA margins expanded 80 bps YoY to 29.9% in 3QFY19 led by improved performance from regional channels. Aided by increase in effective rate (ER) and inventory utilization (in regional channels where there is sufficient scope) we expect consolidated sales to grow at a CAGR of 20.3% over FY18-21E. EBITDA growth is expected to be much higher at 34.7% over the same period as 1) new launches are expected to benefit from integrated multimedia newsroom (IMN) initiative (cost gets shared across platforms) and 2) improvement in profitability mix of regional channels.

Outlook

The stock currently trades at 12x FY20E and 10x FY21E and appears to be attractively priced. We maintain BUY with a TP of Rs38 per share (18x core TV broadcasting business and 22x Zee Akaash News Pvt Ltd).

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