Leading the media revolution - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Leading the media revolution

Feb 18, 2000

Zee Telefilms is definitely one of the more popular companies in India. And not just because it dishes out the favourite programs of million of Indians and services them through its cable and satellite network. A large part of the popularity has got to do with the company's stupendous performance in the stock markets. The company's stock is up 21 times during the last year.

The reasons for the company's growing popularity among investors, management circles and company watchers are not far to seek. The company is promoted by Subhash Chandra, who, by virtue of his 70% holding, is now among the richest Indians. His other assets include the Essel Group of companies and more recently his majority stake (co-owned) in ICO Global.

Zee Telefilms was part of the consortium (which included the Rupert Murdoch owned Star Network) that was responsible for revolutionising the Indian satellite television (media) sector. The company, which subsequently went on to buy out Rupert Murdoch's stake in both the joint ventures (Asia Today Limited, the broadcasting company, and Siticable Limited), today commands an enviable position in the Indian media sector.

The company currently airs three channels (Zee TV, Zee News, Zee Cinema) in Hindi and three regional channels ('Alpha'). Apart from this, it has a presence in various other countries - Zee USA, Zee UK, Zee Africa and Zee Europe. The company owns 'Siticable' a leading cable operator in a number of major cities across the country and also has interests in education (Zee Education), which is primarily television based.

Zee is revving up its media empire. It is in the process of launching a sports channel. Zee has already been awarded the satellite rights to telecast cricket matches in India and this should help it in establishing the new channel. The company is said to be in talks with Viacom (Nickelodeon) for launching a channel for children. This will ensure that Zee offers a complete bouquet of channels, thus making it easier to market them to tight fisted cable operators across the country.

The kicker comes from Zee's plans to offer broadband services to customers via its satellite TV cable network. The company is already marketing this service in select pockets. Other players are still some time away from offering such a service. Then there are plans to establish Zee as a full-fledged portal on the Internet. The success of this service will help Zee establish a significant presence as an Internet service provider cum content provider. This factor has been one of the key drivers of the company's stock price in recent months.

Zee is also focussing on increasing growth in activities that currently form a small portion of overall revenues. First involves giving a thrust to its print media business. As a second step the company plans to increase its presence in the movie production business. Finally, in a move that will also give its Internet ambitions a thrust, Zee plans to expand its retail cable network. The last of these will help the company in building up a subscription revenue base.

Zee's financial performance continues to baffle company watchers. During the quarter ended 31st December 1999, the company's topline grew by 41 percent even as net profits surged 54 percent.

(Rs m) 3QFY2000 3QFY1999 Change
Sales & Services 874.6 620.5 41.0%
Other Income 28.3 17.6 60.8%
Expenditure 557.4 396.6 40.5%
Interest 22.0 22.1 -0.5%
Depreciation 6.9 6.3 9.5%
Profit before Tax 316.6 213.1 48.6%
Tax 68.0 52.0 30.8%
Profit after Tax/(Loss) 248.6 161.1 54.3%
Net profit margin (%) 28.4% 26.0%

Zee Telefilms is however facing stiff competition in all its business segments. Its satellite TV channels are losing market share to Sony India and a host of other newcomers. Infact the company's venture into regional channels was prompted by the extraordinary success of channels like Sun TV. Its cable business is competing with the likes of IN Network and a multitude of local operators that are resisting moves to sell out to Zee.

The company's Internet foray has been greeted with cautious optimism. This is mainly due to intense competition among existing Internet service providers (ISP) and doubts that broadband may not be as successful in India due to the low quality of infrastructure and the high cost of service.

Zee Telefilms recently completed a private placement of equity with Goldman Sachs to fund its future capex plans and its buyout of stakes in various joint ventures with Rupert Murdoch. With its restructuring now complete, Zee Telefilms is all set to carve its share in the Indian entertainment/Internet sector.

Equitymaster requests your view! Post a comment on "Leading the media revolution". Click here!


More Views on News

ZEE ENTERTAINMENT 2020-21 Annual Report Analysis (Annual Result Update)

Oct 18, 2021 | Updated on Oct 18, 2021

Here's an analysis of the annual report of ZEE ENTERTAINMENT for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of ZEE ENTERTAINMENT. Also includes updates on the valuation of ZEE ENTERTAINMENT.

Shareholder Activism Triggers a 30% Rally in Zee Entertainment Shares (Views On News)

Sep 14, 2021

Zee Entertainment shares zoom after top investors seek CEO and MD Punit Goenka's removal.

ZEE ENTERTAINMENT Announces Quarterly Results (1QFY22); Net Profit Up 614.0% (Quarterly Result Update)

Aug 9, 2021 | Updated on Aug 9, 2021

For the quarter ended June 2021, ZEE ENTERTAINMENT has posted a net profit of Rs 2 bn (up 614.0% YoY). Sales on the other hand came in at Rs 18 bn (up 35.3% YoY). Read on for a complete analysis of ZEE ENTERTAINMENT's quarterly results.

What Fuelled the Sudden Surge in PVR and Inox Shares Today (Views On News)

Sep 27, 2021

Shares of both multiplex chain operators surged almost 18% to hit their 52-week highs.

8 Penny Stocks with Exceptionally High Promoter Holding (Views On News)

Sep 25, 2021

While high promoter holding is a good thing, there can be rare cases where penny stock promoters use misleading information about the actual valuation.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Dec 3, 2021 (Close)


  • Track your investment in ZEE ENTERTAINMENT with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks