Zee: Regaining the thunder? - Views on News from Equitymaster

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

  • MyStocks

MEMBER'S LOGINX

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

Zee: Regaining the thunder?

Jul 18, 2002

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)1QFY021QFY03Change
Sales2,3352,4886.5%
Other Income206.5162.1-21.5%
Expenditure1,7401,730-0.6%
Operating Profit (EBDIT) 59675827.3%
Operating Profit Margin (%)25.5%30.5% 
Interest 204.3182.2-10.8%
Depreciation36.156.757.1%
Profit before Tax56268221.3%
Tax197.8204.83.5%
Profit after Tax/(Loss)36447731.0%
Net profit margin (%)15.6%19.2% 
No. of Shares (m)412.5412.5 
Diluted Earnings per share*3.54.6 
P/E (at current price) 25.5 
*(annualised)   

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)1QFY021QFY03Change
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 ENTERTAINMENT Announces Quarterly Results (3QFY21); Net Profit Up 14.2% (Quarterly Result Update)

Feb 5, 2021 | Updated on Feb 5, 2021

For the quarter ended December 2020, ZEE ENTERTAINMENT has posted a net profit of Rs 4 bn (up 14.2% YoY). Sales on the other hand came in at Rs 27 bn (up 33.2% YoY). Read on for a complete analysis of ZEE ENTERTAINMENT's quarterly results.

ZEE ENTERTAINMENT 2019-20 Annual Report Analysis (Annual Result Update)

Jan 8, 2021 | Updated on Jan 8, 2021

Here's an analysis of the annual report of ZEE ENTERTAINMENT for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of ZEE ENTERTAINMENT. Also includes updates on the valuation of ZEE ENTERTAINMENT.

ZEE ENTERTAINMENT Announces Quarterly Results (1QFY21); Net Profit Down 94.5% (Quarterly Result Update)

Sep 1, 2020 | Updated on Sep 1, 2020

For the quarter ended June 2020, ZEE ENTERTAINMENT has posted a net profit of Rs 292 m (down 94.5% YoY). Sales on the other hand came in at Rs 13 bn (down 34.7% YoY). Read on for a complete analysis of ZEE ENTERTAINMENT's quarterly results.

ZEE ENTERTAINMENT 2018-19 Annual Report Analysis (Annual Result Update)

Sep 9, 2019 | Updated on Sep 9, 2019

Here's an analysis of the annual report of ZEE ENTERTAINMENT for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of ZEE ENTERTAINMENT. Also includes updates on the valuation of ZEE ENTERTAINMENT.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

My 'Unlock' Investments (Fast Profits Daily)

Jun 11, 2021

The best unlock investments you can make in the market.

The Most Visible Sign of India's Revival is on Two Wheels (Profit Hunter)

Jun 9, 2021

Investing in the best stocks could result in wealth compounding on a massive scale.

How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

Jun 11, 2021

Charlie Munger's open secret about investing success.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

ZEE ENTERTAINMENT SHARE PRICE


Jun 16, 2021 (Close)

TRACK ZEE ENTERTAINMENT

  • 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

MORE ON ZEE ENTERTAINMENT

ZEE ENTERTAINMENT - DECCAN CHRONICLE COMPARISON

COMPARE ZEE ENTERTAINMENT WITH

MARKET STATS