Pick Of The Week - Zee Entertainment Enterprises Ltd

17th May 2021 By Edelweiss

ZEE Entertainment Enterprises Limited (ZEEL) is one of the largest media companies in India. It owns and operates Zee TV and Zee Cinema, both leading channels in the Hindi GEC and movies segments, respectively. Besides these two, the company has an attractive bouquet of several other channels including &pictures, &TV, ZEE Anmol, Zindagi, Zing, Zee Classic, Zee Action, Zee Café and Zee Studios. With the likes of Zee Marathi, Zee Bangla, Zee Telugu, and Zee Kannada, the company has an impressive bouquet of regional channels.

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Key Highlights
  • GDP recovery, improvement in its market share in regional and movies genres and new launches will aid ad revenue growth. The outlook for advertising remains positive as businesses gradually steer towards normalcy, not to mention improving consumer sentiment.
  • ZEEL’s plan to focus across platforms is likely to deliver strong growth. Higher penetration of DTH and the digitisation process augur well for faster growth in subscription revenue over the long term.
  • Consistent improvement in cash (INR18bn; up 26% QoQ in Q3FY21) – led by an INR4bn decline in inventory and advances – and the tailwind to TV advertising can lead to rerating.
  • ZEEL will increase investment in content across mediums. Guidance on margins and FCF/PAT conversion would provide further clarity.

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