INSUBCONTINENT EXCLUSIVE:
Brokerages see resolution of promoter pledge issues as the key trigger for Zee Entertainment Enterprises going ahead
Some of the brokerages have cut their target price on the stock after the second quarter result
Analysts were also concerned with continued spike in inventories and receivables leading to negative operating cash flow.
Zee Entertainment
on Thursday posted a 6.9% rise in consolidated profit for the September quarter from a year ago at ?413.23 crore
Consolidated revenue jumped 7.4% to ?2,122 crore
front, with domestic subscription revenues growing over 25% and market share gain in advertising revenue as well
has cut earnings estimates for Zee by 4-6% and lowered the fair value to ?340 from ?365
The stock faces a fair set of challenges considering promoter pledge issues and balance-sheet deterioration but the business is
fundamentally in good shape and attractively valued.
Promoters losing control of the company would be a worst-case scenario and could
shares remains a key trigger for the stock even though the valuation is attractive now
The brokerage said advertising growth in the near term is likely to be subdued.
However, some brokerages have raised target price on the
CLSA has increased its target price on Zee to ?320 from ?290 as the stock is trading at a 60% discount to its historic valuation.