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Margins are better-than-expected for Zee Entertainment, says Dolat Capital

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Margins are better-than-expected for Zee Entertainment, says Dolat Capital.

Margins are better-than-expected despite the content cost and investment in the digital platform for Zee Entertainment Enterprises, said Karan Taurani, vice president, research at Dolat Capital.
Media firm Zee Entertainment Enterprises on Tuesday reported a 31.27 percent rise in its consolidated net profit at Rs 325.88 crore for the quarter ended June 30. The company had posted a net profit of Rs 248.25 crore during the same period a year ago.
Taurani said the valuations are expensive currently and the stock has basically underperformed against the Nifty in the last three months.
"In absolute returns, it has been a negative return of close to between 15-20 percent. So, we do expect some kind of positive uptick in the near term in this stock," Taurani said.
According to Taurani, the house has reduced rating on the stock and in terms of earnings per share estimate for FY19, it is placed at about Rs 15 odd.
"We currently have a target price of Rs 580 on the stock. We don’t expect any major change in the revenue front. But there might be a minor upgrade on the
earnings before interest, taxes, depreciation, and amortization (EBITDA) margin front and that could have a positive impact on our earnings," he added