Zee Entertainment’s share price dropped 2% on Friday’s trading session following the company’s Q2 results. Domestic brokerages seem to have mixed views post Zee Entertainment Enterprises Q2 earnings. For the September quarter, the company recorded an 8.92% increase in its consolidated net profit to ₹122.96 crore on Thursday. In a regulatory filing the company said that for the previous year during the same time, it reported a net profit of ₹112.89 crore. Zee Entertainment’s share price today opened at ₹264.70 apiece on BSE.
Throughout the week, Zee Ent’s share price has been under pressure and lost about 6%. “We are not seeing any major outperformance from this counter in the near term. However we see strong support around 250 that is likely to act as a buying zone if in case of any further dip, on the higher side, 275 is resistance,” said Rajesh Bhosale – Equity Technical and Derivative Analyst, Angel One.
According to Ruchit Jain, Lead Research Analyst at 5paisa, Zee Ent stock is consolidating in a broad range of 240-275. This seems to be a time-wise corrective phase and a breakout beyond this range will lead to the next directional move.
In the second quarter of this fiscal year, the company’s total income was 23% higher at ₹2,509.57 crore than in the same period last year, at ₹2,040.87 crore.
According to the company’s exchange filing, “strong performance in digital and healthy viewership gains in linear” were the main drivers of this. However “YoY margins lower due to increase in content cost and investment in ZEE5,” stated the report.
For the quarter ended September, Zee Entertainment spent a total of ₹2,205.67 crore, an increase of 23.02%. For the July–September quarter of FY24, its advertising income dropped 3.3% to ₹979.17 crore.
Nuvama Institutional Equities
Zee Entertainment reported Q2FY24 revenue, EBITDA, and adjusted PAT that were higher than anticipated, according to the brokerage. Ad revenue fell 3.3% YoY but increased 4.1% QoQ. YoY, subscription income increased by 8%. The good theatrical reception of the film “Gadar 2” and increased syndication drove a 201% YoY increase in other sales and services. Zee5 sales increased by 59% year over year, and operating leverage and careful cost control helped to reduce EBITDA losses.
“In light of the overall good recovery in Q2FY24 and key hurdles to the merger finally getting addressed, we continue to be positive on Zee—valuing the core business (ex-Zee5) at 14x PE and Zee5 at 3x price/sales. The brokerage said that this yields an unchanged target price of ₹430; retain ‘BUY’.
With the help of the movie business, Zee’s consolidated revenue increased by 20% to ₹2,440 crore (14% beat). Revenue from advertisements stayed modest. EBITDA increased by 12% to ₹330 crore (beat) as higher film expenses somewhat offset robust revenue growth. Driven by strong EBITDA, PAT increased 21% YoY to ₹170 crore (a large beat) after being adjusted for unusual items and one-time gains.
We cut our FY25 EBITDA/PAT estimates by 4%/5%, building in a slower recovery in ad and subscription revenue. With the merger now being procedural, we believe that current valuations do not seem to justify the strong potential of the merged entity’s competitive position in both linear and digital segments. We maintain our BUY rating with a target price of ₹300,” the brokerage said.
Kotak Institutional Equities
Zee’s EBITDA increased by 12% year over year to ₹330 crore, according to the brokerage’s report. This growth was attributed to the syndication contract and the box office success of “Gadar 2.” Partially due to a change in ad spend towards the sports category, ad sales fell 3.3% year over year. Led by operating leverage, cost control, and syndication deals, ZEE5’s losses gradually decreased.
Management indicated that it is working to address all the conditions so that the merger can be concluded in the next few weeks. We maintain our REDUCE rating and an unchanged FV of Rs275, valuing Zee at 17X September 2025E MergeCo earnings that factor in merger synergies, moderation in OTT losses, and cost savings from upfront write-offs of inventory and potential sports losses,” the brokerage said.