ZEEL flagship Zee TV further extends its lead in pay GEC space; regional portfolio also on an uptrend: Based on viewership data from the BARC website, Zee TV further strengthened its position among pay Hindi GECs in May 2018.
ZEEL flagship Zee TV further extends its lead in pay GEC space; regional portfolio also on an uptrend: Based on viewership data from the BARC website, Zee TV further strengthened its position among pay Hindi GECs in May 2018; Zee TV had a ‘relative’ viewership share of 26.4% (up 183 bps m-o-m), while market share of 2 Colors declined for the fifth straight month, to 19.1% in May vs. 21.4% in April and a peak of 24.6% in Dec-17. In the free-to-air [FTA] domain in rural markets, Zee Anmol maintained its pole position among Hindi GECs—weekly viewership volumes or TVMs during May were 29-42% ahead of the 2 channel.
In the Hindi movies genre, Sony Max maintained its lead position, whereas Zee Cinema didn’t feature among Top 5 in just one of the five rating weeks in May. Zee’s performance in Regional GEC space was robust Marathi—clear leadership maintained [relative share up 175bps m-o-m to c.58%]; Bangla narrowed gap vis-à-vis the channel; Kannada—maintained 2 rank behind Colors; Telugu— steady #2 maintained behind Star’s MAA TV; Tamil—maintained 3 rank in May but exited at 2 for the first time in the last four months. Zee Tamil had an average share of 18.3% in May, within striking distance of Star Vijay at 19.0%. Separately, Zee is gearing up for its Malayalam entry (only southern market where it’s absent), with a GEC launch likely by end 2QFY19. Net-net, continued across the board improvement in TV ratings augurs well for Zee’s FY19 ad revenue growth, aided by ongoing macro-driven ad-spend recovery, led by the FMCG sector.
Flagship Tamil GEC, Sun TV, continued to see erosion in viewership share (average of 42.4% in May vs. 44% in April). Telugu GEC remained stuck at 4 with a 20.4% share.
We tweaked down GTPL target price to `215 (Jun-19) post the release of FY18 consolidated results. GTPL remains the best run and the most undervalued video business among listed MSOs—trading at EV/EBITDA of 4.6x and a P/E of 11.4x on our FY19 estimates. Zee shares were down 5.4% in May, while Sensex rose 0.5%. After a rather muted c.8% EBITDA growth in FY18, we expect growth rate to surge in FY19, despite higher investments—original content for OTT platform (Zee5), movie production, catalogue build-up for launch of movie channels in regional languages and upcoming Malayalam GEC launch.