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Zee Ent.: Margins take a beating - Views on News from Equitymaster
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Zee Ent.: Margins take a beating
Nov 13, 2015

Zee Entertainment announced its results for the second quarter of the financial year 2015-16 (2QFY16). The company reported a 24% YoYgrowth in sales and a9% YoYgrowth in profit after tax. Here is our detailedanalysis of the results.
Performance summary
  • Zee's revenues grewby 24% YoY in 2QFY16.
  • The company failed to curtail its overall operating costs, causing a fall in EBITDA margins from 28.7% in 2QFY15 to 25.6% in the quarter gone by.This caused operating profit to grow by just 10.7% YoY despite the stellar revenue growth.
  • Profit after tax grew by 8.7% YoY.

Financial performance snapshot

(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Net sales 11,178 13,849 23.9% 21,729 27,248 25.4%
Expenditure 7,974 10,303 29.2% 15,433 20,589 33.4%
Operating profit (EBDITA) 3,205 3,546 10.7% 6,296 6,658 5.8%
EBDITA margin (%) 28.7% 25.6% -3.1% 29.0% 24.4% -4.5%
Other income 522 589 12.8% 912 1,269 39.2%
Interest 23 21 -8.8% 44 36 -18.7%
Depreciation & amortisation 134 198 47.8% 330 366 11.0%
Profit before tax 3,570 3,916 9.7% 6,834 7,525 10.1%
Exceptional items - (331)   - (331)  
Tax 1,300 1,123 -13.6% 2,464 2,308 -6.3%
Profit after tax before minority interest 2,270 2,463 8.5% 4,370 4,886 11.8%
Minority interest (6) (11)   (11) (26)  
Share of profit & loss of associate - -   - -  
Profit after tax 2,276 2,474 8.7% 4,381 4,912 12.1%
Net profit margin (%) 20.4% 17.9%   20.2% 18.0%  
No. of shares (m)         960.5  
Basic reported earnings per share (Rs)         10.7  
P/E (x)*         36.4  

(*on a trailing twelve month basis)

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