Zee Entertainment Q4 Review - Investment Drive To Overweigh Margins: Prabhudas Lilladher
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Prabhudas Lilladher Report
ZEE Entertainment Enterprises Ltd.’s numbers were marginally ahead of our estimates with Ebitda/profit after tax beat of 13%/6% respectively.
Recovery process in domestic ad-revenues continued (8.9% growth in Q4 FY21 after registering 7.5% growth in Q3 FY21) with management indicating a possibility of double-digit growth in FY22E (over base of FY20) provided localized lockdowns do not extend beyond Q1 FY22.
While there are near term headwinds on margins given the ongoing investment drive especially in digital and movie production business we remain positive on the company given-
- market share gains in languages like Bengali, Kannada and Telugu,
- scaling down of investments in Sugar Box (non-core investment fraught with evolution risk), and
- likely emergence of ZEE5 as future growth engine in changing content consumption landscape.
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