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Moneycontrol Pro: Zee Ent in focus; investors can bet with medium to long-term view

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Moneycontrol Pro: Zee Ent in focus; investors can bet with medium to long-term view

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In the special segment of ‘Moneycontrol Pro Ideas For Profit’, Moneycontrol.com’s Nitin Sharma gets more details on Zee Entertainment's performance, going forward. It fell out of favour recently on revised EBITDA margin guidance due to weak advertising revenue recovery. Indian ad spending is set to grow by 10.8 percent this year to $9 billion, of which the television ad segment accounts for 41 percent, and it is expected to grow by 7.7 percent to $3.7 billion.

Zee Entertainment Enterprises fell out of favour recently on revised EBITDA margin guidance due to weak advertising revenue recovery. Indian ad spending is set to grow by 10.8 percent this year to $9 billion, of which the television ad segment accounts for 41 percent, and it is expected to grow by 7.7 percent to $3.7 billion.

While digital accounts for 29 percent and is expected to grow to $ 2.6 billion. Zee’s vast presence in both TV and digital space, places it in a unique position to benefit from both, slowing but sizeable TV ad spending and rapidly growing digital ad spends.
The company’s 60 percent revenue comes from the ad segment, while subscription revenue is around 36 percent. Zee’s OTT business ZEE5 contributes 6 percent to its revenue and has been growing consistently, both with regard to revenue as well as monthly users.
Currently, it enjoys 9 percent market share in Indian video OTT segment. Company expects digital business to contribute 30 to 35 percent to group revenue in the long term.
We expect Zee to see gradual advertisement demand recovery from the second quarter onwards, along with a strong growth trajectory. The stock is currently trading at 11.5 times of FY23 EPS and we recommend investors to accumulate the stock with a medium to long-term view.
In the special segment of ‘Moneycontrol Pro Ideas For Profit’, Moneycontrol.com’s Nitin Sharma gets more details on the company’s performance, going forward.
Watch the video for more
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