Global firm CLSA is bullish on the shares of Zee Entertainment Enterprises after the company posted stellar Q2 profits. The media player’s consolidated profit grew by a whopping 148 percent year-on-year to Rs 590.80 crore, largely led by proceeds from sale of sports broadcasting business and other income. Profit in the year-ago quarter stood at Rs 238.4 crore. Notably, the company’s advertising revenue grew by 2.9 percent year-on-year to Rs 986.7 crore, aided by festive season but impacted by GST disruption. CLSA says that the company is favourably placed to leverage a pick-up in advertising post GST rollout. Further, the firm observed that gains in both network and GEC viewership are extensive.
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CLSA has raised the target price on the shares to Rs 707 from Rs 660 earlier. Zee Entertainment shares were trading at Rs 587 on Wednesday morning. CLSA’s target price implies an upside of more than 20% from the current market prices. CLSA says that the stock is trading at a three-year average PE.
Media industry is the next big wealth creation opportunity says ace investor Porinju Veliyath. In a recent tweet, the expert shared that he’s looking at the media and entertainment space. He sees a lot of opportunity in the sector as media space still doesn’t command a very high market capitalisation. Porinju Veliyath told CNBC TV18 recently that he had always been bullish in the media sector.
“There’s a lot of growth opportunity for smaller unlisted entities to enter the space as India is a huge market with 1,300 million people and there’s hardly any market capitalisation,” he told the channel.In a recent interview to ET Now, Porinju Veliyath said “I like two mid-cap media stocks currently, Zee Media and Balaji Telefilms. Investors could explore and try to understand the business model and their relevance for the future. We hold both the stocks in our portfolio (PMS),” he told ET Now in an interview in September.