Shares of Zee Entertainment Enterprises Ltd (ZEEL) plunged 9.6 percent on Tuesday, hitting an intra-day low of Rs 454.40 after brokerages downgraded the stock. The stock opened at Rs 498, slipping from Monday's close of Rs 501.85.
Shares declined after brokerage firms revised ratings and price target on growth concerns and enhanced competition.
Kotak Institutional Equities downgraded Zee to "reduce" and revised price target to Rs 430 from Rs 600.
Likewise, Bank of America Merril Lynch (BofAML) has also cut the rating to "underperform", with a revised price target of Rs 375.
The BofAML cut the earnings per share estimate for ZEEL by 6 percent for 2019-20 (April-March) and 7 percent for 2020-21 (April-March).
The brokerage believes the market is underestimating the competition for digital content, and that the company needs to invest in its over-the-top offerings.
Last month, Zee announced promoter decision to divest up to 50 percent of their stake in the entertainment firm to a strategic partner.
The Essel Group firm has given negative returns of 19 percent to its shareholders in a year. In a month, the stock has recovered 4 percent.
ZEEL share is the top drag on Nifty Media along with another Essel Group firm stock, Dish TV, which has dipped more than 2.5 percent.
The sectoral index traded lower by 4.05 percent, while the frontline Nifty50 traded at 10,909, marginally up by 21 points, or 0.19 percent at 2.45 pm. The Sensex was up by 77 points, or 0.21 percent, to trade at 36,347.
At 2.48 pm, ZEEL shares were trading at Rs 465.20, lower by 7.30 percent.
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-With inputs from agencies