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Zee jumps 3%, hits 52-week high; Macquarie expects stock to outperform with 20% EPS CAGR

November 22
22:06 2017
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Shares of Zee Entertainment jumped 3.4 percent intraday on Wednesday after research firm Macquarie maintained an outperform rating on the stock with a target at Rs 615 per share.

The house is of the view that growth is set to rebound for the company starting H2 FY18 and feels that it has ample levers to continue its investments and achieve over 30 percent margins.

The firm estimates close to 20 percent earnings per share (EPS) coumpund annual growth rate (CAGR) over FY17-20 led by sports sale, rebound in ad growth and on going digitisation. It expects turnaround in three key loss-making segments – TV, Tamil and Music in FY19.

In an interview to CNBC-TV18, Punit Goenka, Managing Director and CEO of Zee Entertainment said that he is confident that in next 3-4 years the subscription growth will be in mid-teens. He is also confident of reaching 30 plus hours in terms of content by end of December.

The proceeds from the sports arm sale to Sony would be used to pay back to the shareholders and the redeemable preference shares will be bought back soon, he added.

At 12:42 hrs Zee Entertainment Enterprises was quoting at Rs 558.20, up Rs 18.30, or 3.39 percent. It has touched a 52-week high of Rs 562.90.

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