Geojit has given Buy recommendation for Zee Entertainment Enterprises with a target price of Rs. 233 in its research report issued on May 25, 2021
Geojit’s research report on Zee Entertainment Enterprises
Revenue inched up 0.8% YoY in Q4FY21. Growth in Ads revenue (+8.1% YoY) and subscription revenue (+8.4% YoY) was partially offset by lower other sales and services revenue (-76.9% YoY). EBITDA rose to Rs. 541cr vs. Rs 284cr loss in Q4FY20 on lower costs. Adj. PAT (adjusted for one off impairment pertaining to digital publishing segment) totaled Rs. 305cr vs. Rs. 653cr loss in Q4FY20. Due to uncertainties in the economic climate, management decided to scale down its investments in Sugarbox for the foreseeable future We remain optimistic on the stock, as company expects double digit growth in ads business, while OTT platform should support strong growth in the subscription business.
We reiterate our BUY rating on the stock with rolled forward target price of Rs. 233 based on 13x FY23 adj. EPS.