ZEE Entertainment shares rally 5% after Q4 results. Should you buy, sell or hold?
ZEEL swung back to profit in March quarter against loss a year ago. Its total income in the reporting quarter, too, increased 3% YoY to Rs 2,185 core. Goldman Sachs sees partial recovery in revenues as a positive sign.
Shares of rose 5% on Saturday on BSE to the day’s high of Rs 141.65 after the company on Friday reported a for the March against loss a year ago.Zee on Friday reported a net profit of Rs 13.35 crore for the quarter ended March 2024, compared with a loss of Rs 196 crore in the same quarter of last year. The total income in the reporting quarter increased 3% year-on-year to Rs 2,185 core.
ZEE has said that it will see most of the one-time higher costs towards implementing the interventions in the current quarter, offsetting underlying operating performance improvements and causing softness on margins.
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Here’s how view the results:
Goldman Sachs
The partial recovery in revenues was appreciable. However, margins remained subdued coupled with a weak EBITDA profile at 9.7% for the fourth quarter. Goldman has cut its fY25-27 revenue/EBITDA estimate forecasts by 5%-8%/30%-37%.
The global brokerage has a ‘neutral’ view on the stock with cut down to Rs 167.
Nuvama
Zee Entertainment posted Q4FY24 revenue/EBITDA (up 2.7%/38.5% YoY) beating Nuvama’s estimates. Overall, the brokerage increased FY25E/26E forecast by 1.4%/2.6% on the back of improving outlook for FMCG advertisers, but cut EPS by 19%/6% as ZEE is transitioning towards a more focused structure, entailing high one-time costs in FY25.
has upgraded the stock to ‘buy’ from an earlier ‘reduce’ with a revised target of Rs 180.
Emkay Global
Domestic brokerage firm Emkay Global said it is building in some recovery on the front for ZEE (7% growth in FY25E/26E) aided by a lower base and persistent recovery in overall ad spending. Subscription revenues should see an uptick due to price hikes. Margins should also improve on account of multiple interventions, though Emkay reiterated that a significant re-rating should happen in case of a new buyer/partner. Any unfavorable decision in legal cases the company is involved in could be a key risk.
Emkay has maintained a ‘reduce’ rating on the stock with an unchanged target price of Rs 150.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Source: Stocks-Markets-Economic Times
