Zee Entertainment (ZEEL) share price soared over 7 per cent after the company on Tuesday reported a 12.93 per cent rise in its consolidated net profit at Rs 260.61 crore for the fourth quarter ended March 31, 2016. ZEEL had registered a consolidated net profit of Rs 230.77 crore in the January-March quarter a year ago.
Consolidated total income of ZEEL increased 13.70 per cent to Rs 1,531.62 crore during the quarter under review as against Rs 1,347.05 crore in the corresponding quarter last year.
According to Religare Institutional Research, ZEEL reported strong Q4 results with above-expected revenues. Valuations of the company are not cheap but margin recovery should support the earnings per share (EPS) momentum into FY17. The brokerage house has ‘Buy’ recommendation on ZEEL shares with target price of Rs 480.
Sharekhan in a research note said, “ZEEL continues to outperform the broadcasting advertising market and expects to continue the momentum with improvement in the macro economy. The management indicated that the strong momentum will continue in the ads revenue growth led by higher investments in contents along with focus on international markets and market-share gains. We have marginally tweaked our estimates for FY2017-18 owing to a slower-than-expected growth in the subscription space. Nevertheless, we continue to see ZEEL as the prime beneficiary of macro revival and digitisation. Therefore, we have maintained our ‘Buy’ rating on the stock with an unchanged price target of Rs 470.”
The share price of Zee Entertainment closed 7.13 per cent up at Rs 447.50 on BSE.