Reduce Zee Entertainment; target of Rs 140: Emkay Global Financial

Emkay Global Financial recommended reduce rating on Zee Entertainment with a target price of Rs 140 in its research report dated October 20, 2024.

October 21, 2024 / 12:12 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on Zee Entertainment

Zee reported a mixed operating performance in Q2FY25. Advertising revenue growth remained underwhelming, declining by another 7.9% YoY. Ad revenue has now declined (YoY) in last eight of the nine quarters. Subscription revenue saw an uptick of 9.2% YoY. Margins surprised positively as Zee contained expenses across the board. Management stated that advertising environment has picked up in September in the run-up to the festive season, although longterm spending trend remains uncertain as of now. Zee has made some progress on their financial aspirations which were announced after breakdown of the merger, though lack of ad revenue growth recovery remains the biggest concern. In our view, going ahead, the absence of revenue pickup will act as a hindrance for further margin expansion.

Outlook

We reiterate that a significant re-rating should be possible in case of a new partner/buyer. With persisting challenges on the advertising growth front, we cut our FY26-27 EBITDA by 8-10%. We maintain REDUCE with TP of Rs140 (8x Sep-26E Broadcasting EBITDA).

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