Buy Zee Entertainment; target of Rs 530: Anand Rathi
Anand Rathi’s research report on Zee Entertainment
Zee?s robust domestic ad growth is expected to continue due to the favourable ad environment (FMCG contributes ~55% to ad revenues), sustained focus on regional markets (GEC launch in Kerala) and adding movie channels in Tamil and Kannada. To tackle the digital disruption, it launched Zee5, expected to break even in the next 3-5 years. The stock has slid 30% in the last five months.
Introducing FY21e, we raise our recommendation to a Buy, with a TP of `530, valued at 17x FY21e EV/EBITDA, from 19x earlier (FY20e), implied PE: 28x.
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