ICICI Direct is bullish on Zee Media has recommended buy rating on the stock with a target price of Rs 33 in its research report dated October 17, 2018.
ICICI Direct's research report on Zee Media
We, had come out with Idirect Instinct on Zee Media (ZMCL) in September, 2017. As a recent development, the company confirmed that due to expiry of the MoU signed between the company and Big FM for acquisition of radio channels, the deal stands called-off as of now and we exclude the radio valuations from our target price. Nevertheless, we highlight that ZMCL is in a sweet spot after de-merger of loss making print business and sale of online shopping business. Moreover, it remains a quasi-play on elections (both states and national) given its respectable no. 2 position in Hindi News segment and wider presence in regional space.
ZMCL has showcased superior growth trajectory in its news portfolio vis-à-vis its peers over the 6 quarters, Given the robust growth potential, we assign P/E multiple of 15x (similar to peers), on our rough cut FY20E EPS of Rs 2.2, resulting in fair value target price of Rs 33/share and BUY recommendation. We now exclude the radio valuations upside from our target price, which has resulted in downward revision in target price. Nonetheless, recent correction provides an attractive entry point.
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