Shares of Zee TV slip 15 per cent to Rs 212

Shares of Zee Entertainment Enterprises (ZEE) fell 15 per cent to Rs 212 on the BSE in the intra-day trade yesterday on profit booking as investors worried about shrinking operating profit margin. The stock has slipped 19 per cent from its 52-week high level of Rs 216 touched on February 4.

ZEE on Thursday had reported a 14.4 per cent year on year (YoY) jump in its consolidated net profit at Rs 400 crore for Q3FY21 as against Rs 349 crore in the year-ago period. Operating income grew 33.2 per cent at Rs 2,729 crore on YoY basis.

The company said that domestic advertising revenue for the quarter grew by 7.5 per cent YoY and 43.6 per cent quarter on quarter (QoQ), a sharp recovery post April-September period (H1FY21) reflects the rebound in consumer demand and spending. Ebitda, grew 26.5 per cent YoY to Rs 716 crore, with margins at 26.2 per cent, down 140 basis points (bps) on YoY basis.

Any potential re-rating would be governed by a consistent and disciplined investment approach – restricted to the non-core business – and an improving Ebitda/free cash flow (FCF) profile, the brokerage firm added while maintaining 'Neutral' rating on the stock.

ICICI Securities, meanwhile, has said that ZEE reported a good set of results for Q3FY21. "Domestic ad grew 7.5 per cent YoY while domestic subscription increased 9.3 per cent YoY on like to like basis ahead of expectations. Ad revenue saw strong pick up sequentially owing to festivities and ad pricing reached near normal. However, with high investment proposed in content from FY22 onwards, operating margins and cash flows could remain lower," it added.