Zee Entertainment Enterprises Ltd., incorporated in 1982, is a large cap company (with a market capitalization of Rs 23,503.82 crore) operating in the media and entertainment sector.
Zee Entertainment Enterprises Ltd. Key product/revenue segments include advertising revenue, subscription revenue, television content, broadcast revenue, other operating income and commissions for the year ended March 31, 2021.
For the quarter ended March 31, 2022, the company reported a consolidated total income of Rs 2,361.17 crore, up 10.83% from the previous quarter of Rs 2,130.44 crore, and up 18.99% more than in the same quarter last year, when the total income was 1984.39 crores. The company reported an after-tax net profit of Rs 181.95 crore in the latest quarter.
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Zee’s recovery in market share this year has been uneven, with a further decline in the chain’s share to 17.1% this quarter. Its inability to gain market share despite launching over 90 shows last year is a concern. Zee5 continued to gain momentum with higher MAUs and DAUs. However, higher investment added to the EBITDA loss. Management also stressed that investment will remain strong, which means short-term pressure on margins. The recovery in ad revenue is also likely to be more gradual as advertisers cut back on spending in the face of high inflation. Subscriber revenue growth also remains uncertain as there is no word on the price embargo being lifted. While management remains positive about the initial 8-9 month timetable for the merger, the lack of approval from the stock exchanges so far leads us to conclude that there is likely to be a delay. Given these short-term business concerns, the brokerage believes that any short-term upside triggers for the stock are limited. However, a long-term history with merger synergies will likely put Zee ahead of its competitors.
Promoter / FII Holdings
As of March 31, 2022, the promoters owned 3.99% of the company’s shares, FII – 47.86%, DII – 24.18%.
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