Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Zee: Regaining the thunder? - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 18, 2002

    Zee: Regaining the thunder?

    Zee Tele has reported a strong first quarter performance with 31% rise in consolidated net profits. The company's earnings growth was fueled by a sharp improvement in operating margins and over 50% jump in subscription revenues.

    Zee Telefilms (Consolidated)
    Rs m) 1QFY02 1QFY03 Change
    Sales 2,335 2,488 6.5%
    Other Income 206.5 162.1 -21.5%
    Expenditure 1,740 1,730 -0.6%
    Operating Profit (EBDIT) 596 758 27.3%
    Operating Profit Margin (%) 25.5% 30.5%  
    Interest 204.3 182.2 -10.8%
    Depreciation 36.1 56.7 57.1%
    Profit before Tax 562 682 21.3%
    Tax 197.8 204.8 3.5%
    Profit after Tax/(Loss) 364 477 31.0%
    Net profit margin (%) 15.6% 19.2%  
    No. of Shares (m) 412.5 412.5  
    Diluted Earnings per share* 3.5 4.6  
    P/E (at current price)   25.5  

    During the quarter, the company's advertising revenues inched up by just 2% due to stiff competition from Star & Sony and tighter credit norms imposed by Zee to strengthen its receivables position. Zee's aggressive collection drive enabled it to bring down its debtor days to 227 from 251 days as on March 2002. The company aims to bring down the number to normal levels (161 days in FY01). On the content front, the channel's newly launched programmes, 'Khelo Number Khelo' and 'Kitne Kool Hain Hum' are yet to make its position. In order to improve TRP ratings, the company aims to launch five new programmes before the end of next quarter. Zee, however, is doing well in regional channels (under 'Alpha' brand). Its international operations have also recorded a YoY growth of 35% in revenues during 1QFY03.

    Revenue breakup
    Rs m) 1QFY02 1QFY03 Change
    Advertisement 1,373 1,400 1.9%
    Subscription 668 1,016 52.1%
    Other sales & services 294 72 -75.4%
    Total 2,335 2,488 6.5%

    While advertisement revenues are sluggish, Zee's subscription revenues are flourishing. It has recorded a growth of 52% during the quarter, which accounted for over 40% of total revenues. In order to strengthen pay revenues in the southern market, Zee is in the process of re-launching its 'Kaveri' and 'Bharathi' channels under the 'Alpha' brand name. It could however, face challenges from Sun Network and Vijay TV. Zee Turner presently distributes 14 channels of Zee and 3 channels of Turner in its pay bouquet. ETC Music and ETC Punjabi are also expected to join this bouquet in the near future. The company's official connectivity has increased to 4.4 m homes as on June 30, 2002. Among other developments, Zee has also completed acquisition of both ETC (51% equity stake) and Padmalaya Enterprises (63% stake).

    On a YoY basis, Zee managed to improve its operating margins to 31% in 1QFY03 (30% in 4QFY02) on the back of stiff control on operating costs which declined by 11%. The company also managed to bring down its interest cost by 11% by improving its working capital management.

    At the current market price of Rs 118, Zee is trading at a P/E of 26x 1QFY03 annualised earnings. Overall, the Zee Network has shown strength in its performance in the June quarter driven by healthy growth in subscription revenues. However, sluggish ad revenues and higher debtor days still remains a concern for the company. The company's future re-rating is highly linked to the improvement on these areas.



    Equitymaster requests your view! Post a comment on "Zee: Regaining the thunder?". Click here!


    More Views on News

    Zee Ent: GST Short term Negative but Long term Positive (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The management believes that GST will aid the advertising spends in the long-run.

    GTPL Hathway Ltd. (IPO)

    Jun 21, 2017

    Should one subscribe to the IPO of GTPL Hathway Ltd?

    S Chand and Company Ltd. (IPO)

    Apr 26, 2017

    Should you subscribe to the IPO of S Chand and Company Limited?

    Zee Ent: Advertising drives revenues (Quarterly Results Update - Detailed)

    Aug 1, 2016

    Zee Entertainment has announced its results for the first quarter of the financial year 2016-17 (1QFY17). The company has reported 18.5% YoY growth in sales and a 13.7% YoY growth in profit after tax.

    Zee Ent: Operating Margins Continue Expansion (Quarterly Results Update - Detailed)

    Jun 9, 2016

    Zee Entertainment has announced its results for the fourth quarter of the financial year 2015-16 (4QFY16). The company has reported 14% YoY growth in sales and a 13% YoY growth in profit after tax.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (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



    Detailed Financial Information With Charts