Shares of Zee Entertainment Enterprises Ltd (ZEEL) rose 6% on March 20 after brokerage firm CLSA sees stock price doubling in the next 12-24 months.
The foreign brokerage believes advertising revenue-led growth could lead to a rerating of the stock, as it suggested a target price of Rs 170.
Zee’s EBITDA margin has grown 9 per cent from the bottom and even assuming 6 per cent year-on-year (YoY) advertising growth, Zee could post 22-23 per cent year-on-year (YoY) growth in EBITDA and profit after tax in FY26-27, CNBC-TV18 reported CLSA.
On March 20, Zee Entertainment shares were trading 6% higher at Rs 106.84 per share on the BSE before they pared gains to trade at Rs 102.77 per share.
The brokerage expects the stock to double in the next 12-24 months as its market cap-to-sales ratio of 1x is lower than that of Reliance-Disney JV and Sun TV at 60% to 80%.
Zee is India’s No. 2 TV network and is pushing OTT through the Zee5 platform. CLSA said Zee’s stock is at an “all-time low” at 8x PE.
In January 2024, Sony had pulled out of a proposed $10.5 billion merger with Zee Entertainment Enterprises Ltd citing failure by the Indian firm to meet certain “closing conditions”, leading to a sharp drop in Zee’s stock.
ZEEL and Sony had agreed to the merger on December 22, 2021.
