Zee Entertainment: Elara Says 'buy' Zeel Stock, Gives 80 Per Cent Upside Target

ZEE Entertainment Enterprises Ltd has been awarded a 'Buy' standing by Elara Securities, indicating a promising 80% upside imaginable for its stock. This announcement connected Friday highlights nan prospects for ZEE Entertainment, contempt caller challenges successful its advertizing gross streams.

Elara noted that nan company's FY25 advertizing gross was astatine 70% of pre-Covid levels. Despite this, it foresees a 7% maturation twelvemonth connected twelvemonth for FY26, chiefly owed to a debased guidelines effect. The patient projects a dependable maturation trajectory of 3.5% successful nan mean term. Moreover, ZEE has taken strategical steps to accommodate to nan shifting advertizing landscape.

In nan caller fiscal year, ZEE's margins improved by 390 ground points, attributed to costs efficiencies and reduced losses successful nan ZEE5 segment. Elara expects a humble summation successful EBITDA separator compared to FY25. The valuation of Zee Music, portion of nan portfolio, is estimated betwixt Rs 5,000-6,000 crore, aligning pinch existing listed players.

Elara stated, "Factoring successful this and integer conception resulting successful an charismatic implied valuation (Rs 1700 crore) for nan halfway broadcasting, a imaginable worth unlocking opportunity exists. We present FY28E and clasp EBITDA/EPS estimates for FY26E-27E. We support our target astatine Rs 200." This target values broadcasting astatine 11 times P/E for June 2028E and OTT astatine 3 times price/sales.

ZEE's advertizing gross dipped 24.6% twelvemonth connected twelvemonth successful Q4 owed to viewers shifting attraction to sports events specified arsenic nan Champions Trophy and IPL-25. This was compounded by a weaker advertizing authorities and an election-led precocious guidelines from nan erstwhile year. Nonetheless, ZEE is actively diversifying its customer base, targeting emerging businesses, and refocusing connected 'free-to-air' channels. Elara expects a 7% maturation successful FY26E, influenced by advertisement request betterment successful nan second half of nan year.

Additionally, Elara forecasts a 4.6% compound yearly maturation complaint (CAGR) successful advertizing gross till FY28E. Subscription gross roseate by 3.9% twelvemonth connected year, building connected a debased guidelines of nan erstwhile year. ZEE5 recorded a noteworthy maturation of 15.8% twelvemonth connected year. FY25 was important for ZEE5 pinch EBITDA losses reducing by 49.6% twelvemonth connected year.

Furthermore, Elara commented, "While subscription gross was level sequentially (up 0.4%), nan 3.9% YoY maturation was connected a debased guidelines of past twelvemonth successful nan absence of NTO 3.0. ZEE5 grew a beardown 15.8% YoY. Amid little incremental benefits of NTO3.0, we judge maturation hereon will beryllium a usability of amended personification maturation and gross scale-up led by pricing. FY25 was notable for ZEE5 arsenic EBITDA losses declined by 49.6% YoY. Further simplification successful losses shall beryllium driven by gross maturation than costs power exercises. We expect subscription gross CAGR of 4.6% successful FY25-28E."

Published on: May 9, 2025 12:56 PM IST