ZEE ENTERTAINMENT 2019-20 Annual Report Analysis

Fri, 8 Jan

ZEE ENTERTAINMENT has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

ZEE ENTERTAINMENT Income Statement Analysis

• Operating income during the year rose 2.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 46.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.9% in FY20 as against 32.4% in FY19.
• Depreciation charges increased by 15.3% and finance costs increased by 11.1% YoY, respectively.
• Other income grew by 12.8% YoY.
• Net profit for the year declined by 66.5% YoY.
• Net profit margins during the year declined from 19.1% in FY19 to 6.2% in FY20.

ZEE ENTERTAINMENT Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	79,339	81,299	2.5%
Other income	Rs m	2,515	2,836	12.8%
Total Revenues	Rs m	81,854	84,135	2.8%
Gross profit	Rs m	25,675	13,749	-46.4%
Depreciation	Rs m	2,347	2,706	15.3%
Interest	Rs m	1,304	1,449	11.1%
Profit before tax	Rs m	24,539	12,430	-49.3%
Tax	Rs m	8,673	4,317	-50.2%
Profit after tax	Rs m	15,672	5,246	-66.5%
Gross profit margin	%	32.4	16.9
Effective tax rate	%	35.3	34.7
Net profit margin	%	19.1	6.2

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ZEE ENTERTAINMENT Balance Sheet Analysis

• The company's current liabilities during FY20 down at Rs 25 billion as compared to Rs 31 billion in FY19, thereby witnessing an decrease of -18.9%.
• Long-term debt down at Rs 3 billion as compared to Rs 7 billion during FY19, a fall of 59.8%.
• Current assets fell 2% and stood at Rs 101 billion, while fixed assets fell 11% and stood at Rs 14 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 124 billion as against Rs 129 billion during FY19, thereby witnessing a fall of 4%.

ZEE ENTERTAINMENT Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	89,239	93,439	4.7
Current Liabilities	Rs m	31,169	25,282	-18.9
Long-term Debt	Rs m	7,409	2,975	-59.8
Total Liabilities	Rs m	129,330	123,737	-4.3
Current assets	Rs m	103,339	100,973	-2.3
Fixed Assets	Rs m	15,706	13,979	-11.0
Total Assets	Rs m	129,330	123,737	-4.3

ZEE ENTERTAINMENT Cash Flow Statement Analysis

• ZEE ENTERTAINMENT's cash flow from operating activities (CFO) during FY20 stood at Rs 2 billion, an improvement of 84.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs 4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -11 billion on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs -4 billion from the Rs 332 million net cash flows seen during FY19.

ZEE ENTERTAINMENT Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	1,352	2,499	84.8%
Cash Flow from Investing Activities	Rs m	8,663	3,888	-55.1%
Cash Flow from Financing Activities	Rs m	-9,664	-10,620	-
Net Cash Flow	Rs m	332	-4,148	-

Current Valuations for ZEE ENTERTAINMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.5, an decline from the EPS of Rs 16.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 234.5, stands at -77.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.9 times, while the price to sales ratio stands at 3.3 times.
• The company's price to cash flow (P/CF) ratio stood at 28.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	82.6	84.6
TTM Earnings per share	Rs	16.3	5.5
Diluted earnings per share	Rs	16.3	5.5
Price to Cash Flow	x	12.5	28.2
TTM P/E ratio	x	-77.4	-77.4
Price / Book Value ratio	x	4.8	2.9
Market Cap	Rs m	225,226	225,225
Dividends per share (Unadj.)	Rs	3.5	0.3

Ratio Analysis for ZEE ENTERTAINMENT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.0x during FY20, from 3.3x during FY19. 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 9.6x during FY20, from 19.8x during FY19. 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 5.6% during FY20, from 17.6% during FY20. 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 11.4% during FY20, from 26.5% during FY19. 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 5.4% during FY20, from 13.1% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	3.3	4.0
Debtors’ Days	Days	84	94
Interest coverage	x	19.8	9.6
Debt to equity ratio	x	0.1	0.0
Return on assets	%	13.1	5.4
Return on equity	%	17.6	5.6
Return on capital employed	%	26.5	11.4

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 down from Rs 264.5 to Rs 234.5, registering a loss of Rs 30.0 or around 11.3%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 11,694.7 (up 1.8%). Over the last one year it has moved up from 7,781.3 to 11,694.7, a gain of 3,913 points (up 50.3%).

Overall, the S&P BSE SENSEX is up 19.2% over the year.

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