ZEE ENTERTAINMENT 2022-23 Annual Report Analysis

Wed, 13 Dec

ZEE ENTERTAINMENT has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

ZEE ENTERTAINMENT Income Statement Analysis

• Operating income during the year fell 1.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 53.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.5% in FY23 as against 19.9% in FY22.
• Depreciation charges increased by 41.3% and finance costs increased by 60.3% YoY, respectively.
• Other income declined by 37.4% YoY.
• Net profit for the year declined by 76.1% YoY.
• Net profit margins during the year declined from 12.9% in FY22 to 3.1% in FY23.

ZEE ENTERTAINMENT Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	81,857	80,879	-1.2%
Other income	Rs m	1,366	855	-37.4%
Total Revenues	Rs m	83,223	81,734	-1.8%
Gross profit	Rs m	16,270	7,655	-53.0%
Depreciation	Rs m	2,213	3,127	41.3%
Interest	Rs m	438	702	60.3%
Profit before tax	Rs m	14,985	4,681	-68.8%
Tax	Rs m	4,447	2,167	-51.3%
Profit after tax	Rs m	10,538	2,514	-76.1%
Gross profit margin	%	19.9	9.5
Effective tax rate	%	29.7	46.3
Net profit margin	%	12.9	3.1

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ZEE ENTERTAINMENT Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 26 billion as compared to Rs 22 billion in FY22, thereby witnessing an increase of 18.7%.
• Long-term debt stood at Rs 40 million as compared to Rs 21 million during FY22, a growth of 90.5%.
• Current assets rose 1% and stood at Rs 112 billion, while fixed assets rose 7% and stood at Rs 19 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 133 billion as against Rs 129 billion during FY22, thereby witnessing a growth of 3%.

ZEE ENTERTAINMENT Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	108,594	107,193	-1.3
Current Liabilities	Rs m	22,172	26,322	18.7
Long-term Debt	Rs m	21	40	90.5
Total Liabilities	Rs m	129,316	133,053	2.9
Current assets	Rs m	111,445	112,274	0.7
Fixed Assets	Rs m	17,843	19,135	7.2
Total Assets	Rs m	129,316	133,053	2.9

ZEE ENTERTAINMENT Cash Flow Statement Analysis

• ZEE ENTERTAINMENT's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -4 billion, an improvement of 43% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -5 billion from the Rs 2 billion net cash flows seen during FY22.

ZEE ENTERTAINMENT Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	2,799	1,290	-53.9%
Cash Flow from Investing Activities	Rs m	5,771	-2,015	-
Cash Flow from Financing Activities	Rs m	-7,153	-4,083	-
Net Cash Flow	Rs m	1,502	-4,808	-

Current Valuations for ZEE ENTERTAINMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.6, an decline from the EPS of Rs 11.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 284.0, stands at 320.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.5 times, while the price to sales ratio stands at 3.4 times.
• The company's price to cash flow (P/CF) ratio stood at 41.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	85.2	84.2
TTM Earnings per share	Rs	11.0	2.6
Diluted earnings per share	Rs	11.0	2.6
Price to Cash Flow	x	21.7	41.3
TTM P/E ratio	x	27.2	320.4
Price / Book Value ratio	x	2.4	2.2
Market Cap	Rs m	261,933	233,046
Dividends per share (Unadj.)	Rs	3.0	0.0

Ratio Analysis for ZEE ENTERTAINMENT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 4.3x during FY23, from 5.0x during FY22. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 7.7x during FY23, from 35.2x during FY22. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 2.3% during FY23, from 9.7% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 5.0% during FY23, from 14.2% during FY22. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 2.4% during FY23, from 8.5% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	5.0	4.3
Debtors’ Days	Days	77	73
Interest coverage	x	35.2	7.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.5	2.4
Return on equity	%	9.7	2.3
Return on capital employed	%	14.2	5.0

To see how ZEE ENTERTAINMENT has performed over the last 5 years, please visit here.

ZEE ENTERTAINMENT Share Price Performance

Over the last one year, ZEE ENTERTAINMENT share price has moved up from Rs 260.7 to Rs 284.0, registering a gain of Rs 23.3 or around 8.9%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 15,040.7 (down 1.1%). Over the last one year it has moved up from 13,866.8 to 15,040.7, a gain of 1,174 points (up 8.5%).

Overall, the S&P BSE SENSEX is up 12.0% over the year.

(To know more, check out historical annual results for ZEE ENTERTAINMENT and quarterly results for ZEE ENTERTAINMENT)