Credit Suisse bullish on shares of Zee Entertainment on strong Q3 earnings

By: | Published: January 18, 2018 1:08 PM

Global research firm Credit Suisse cheered for the shares of Zee Entertainment, after the Indian media conglomerate reported strong Q3 earnings. The company has reported a 28% increase in consolidated net profit at Rs 321.72 crore for the December quarter, mainly on account of higher advertisement revenue.

Zee Entertainment shares were trading at Rs 598, up by nearly 1%. on NSE this morning. (Image: Reuters)

Global research firm Credit Suisse cheered for the shares of Zee Entertainment, after the Indian media conglomerate reported strong Q3 earnings. The company has reported a 28% increase in consolidated net profit at Rs 321.72 crore for the December quarter, mainly on account of higher advertisement revenue. Credit Suisse notes that a strong rise in advertising revenue has helped the company to report revenue ahead of estimates. The consolidated profit during the quarter stood at Rs 321.7 crore increased from Rs 250.80 crore in the corresponding period, ZEEL said in a  regulatory filing.

Track live stock price: Zee Entertainment Enterprises

Credit Suisse has increased the target price to Rs 650 from Rs 610 earlier. Zee Entertainment shares were trading at Rs 598, up by nearly 1%. Credit Suisse’s target price implies an upside of more than 8.5% from the current market prices. Credit Suisse says that the advertising markings will sustain going forward. “The slower growth in the last four quarters was due to specific events which required advertisers to recalibrate spends. As the impact of these factors is now behind us, ad spends have bounced back strongly and the outlook remains encouraging,” ZEEL MD and CEO Punit Goenka said.

Subscription revenue during the quarter was Rs 501.69 crore compared to Rs 593.46 crore in the year-ago period. EBITDA for the quarter stood at Rs 5,944 million and EBITDA margin stood at 32.3 percent, the company said. “Advertising spends have bounced back strongly and the outlook remains encouraging. The recent cut in GST rates across a wide category of products should aid the growth,” Punit Goenka, Managing Director & Chief Executive Officer, ZEEL said.

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.

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