The Buzz around Zee Entertainment Share Price Target: Invest or Not?
If you are an investor looking for a stable and profitable stock investment, then Zee Entertainment’s share price could have piqued your interest. After all, it is one of the most trusted media and entertainment companies in India, with a vast reach and a loyal consumer base. However, before you make any investment decisions, it is essential to understand the company’s current state, performance, and future prospects.
The Current State of Zee Entertainment
Zee Entertainment Enterprises Ltd. (ZEEL) is a leading media and entertainment company in India and operates more than 70 channels, including 19 HD channels, serving over 1.3 billion viewers globally. The company has transformed its business model from being a broadcaster to a content creator, taking giant strides in the digital entertainment space.
Recently, the company has faced legal troubles amid allegations of financial irregularities and a leadership crisis. It had also recently announced the sale of its sports network to Sony Pictures Networks India. These events have undoubtedly affected the company’s share price and investor confidence.
Performance Overview
As per the latest financial reports, Zee Entertainment has shown a 5.4% decline in its consolidated net profit at INR 292.5 crores for the quarter ended June 30, 2021, compared to the corresponding period in the previous year. The company’s consolidated operating revenue (excluding sports business) stood at INR 1,547.4 crores, a decline of 23.3% YoY, mostly due to a drop in advertising revenues. However, the company’s OTT platform, ZEE5, has shown growth with 22.5 million active subscribers at the end of June 2021.
The Future Prospects
Zee Entertainment has set aggressive growth targets for the future, with a focus on content creation, OTT business, and expanding its presence in international markets. The company has also announced a substantial investment of INR 22,000 crores over the next five years to propel its growth trajectory.
The management team has set a target of achieving 400-500 million monthly active users by FY26, making it one of the leading entertainment companies in the world. The company’s tie-up with Reliance Industries for content production can be a game-changer for Zee in the long run.
Should You Invest in Zee Entertainment?
Considering the current market conditions, the legal issues, and the leadership turmoil, Zee’s performance has been sub-optimal of late. However, the company’s future growth prospects look promising, especially with its investment plans and shift towards content creation.
Investors should also look at the company’s valuations, dividend policy, and peer comparisons before making any investment decisions. With a current P/E ratio of 39.2 and a dividend yield of 0.50%, Zee’s valuations are higher than its peers within the industry.
Conclusion
Zee Entertainment has been the go-to destination for Indian audiences looking for entertainment options. However, the current state of the company raises concerns among investors. The management’s focus on turning the company into a global entertainment giant and expanding its digital presence is a step in the right direction. However, investors must weigh the company’s future prospects against the current challenges before making any investment decisions.
