Zee Entertainment Enterprises share price added more than a percent in early trade on August 19 after the company reported its June quarter earnings.
The company on August 18, has posted 94.28 percent YoY fall in its consolidated Q1 net profit at Rs 30.37 crore versus Rs 530.57 crore.
Revenue was down 34.66 percent YoY at Rs 1,312.03 crore versus Rs 2,008.12 crore.
Here are the brokerages' view on the stock and the company:
CLSA has retained a buy call with a target at Rs 255 per share. Improved disclosures, TV viewership jump & advisement growth to return in H2, said CLSA.
The company’s Q1 revenue exceeded estimates, while ad revenue was in-line. Zee Network viewership sharply improved to exceed pre-COVID levels, reported CNBC-TV18.
Macquarie has maintained an outperform rating with a target at Rs 250 per share.
The market is under-appreciating steps taken by the company in the past 7 months to improve credibility.
FY21-23E earnings per share (EPS) was up 3-5%, while it raised FY22E price-earnings ratio (PER) target multiple to 14x from 12x, reported CNBC-TV18.
Morgan Stanley has maintained equal-weight rating and raised the target to Rs 150 from Rs 135 per share.
The advertisement & subscription revenue was mostly in line with our estimates, while the company’s Q1 margin & earnings were weaker, said Morgan Stanley.
The company made progress on providing disclosures viz key numbers for Zee5 & quarterly balance sheet. The company also promised to improve corporate governance norms, reported CNBC-TV18.
Broking house maintained a neutral rating with a target of Rs 190 per share.
The ad growth is a lagging indicator of economic growth which remains challenging in the current environment. Further risk of margin pressure remains from over Rs 1.5 bn quarter loss in OTT investments.
We continue to remain watchful of the evolving business situation and governance measures, including the admission of new board members over the next few months and increase in financial disclosures for investors.
Guidance for working capital improvement, improved governance, better disclosures is a positive change. Nonetheless, near term concerns such as ad outlook as well as potential implementation of NTO 2 remain.
We will turn buyers once ad recovery, improved cash flows & overdue recovery from related parties (“walking the talk”) is seen. We do, however, increase our target multiple from 9x FY22 P/E to 11x FY22 P/E with a revised target price of Rs 195/share (Rs 150/share, earlier). Maintain hold rating on the stock.
At 09:23 hrs, Zee Entertainment Enterprises was quoting at Rs 175.55, up Rs 1.60, or 0.92 percent on the BSE.