Zee Entertainment shares opened on a high on Monday after the company reported a net profit of ₹13.35 crore for the March quarter of 2024, bouncing back from a loss of ₹196 crore in the same quarter of the previous year.
What Happened: The company’s total income rose by 3% year-on-year to ₹2,185 crore, driven by a notable increase in advertising and subscription revenues.
Revenue from operations for Zee Entertainment increased by 2.7% to ₹2,169.9 crore in Q4 FY24, compared with ₹2,112.1 crore in the previous year’s corresponding quarter.
Advertisement revenue saw a significant increase of 10% to ₹1,110.2 crore, bolstered by a robust recovery in the advertising sector and increased spending by FMCG clients. Subscription revenue also rose by 8.02% to ₹949.4 crore, while EBITDA surged 38.6% to ₹210.3 crore.
However, Zee Entertainment noted challenges, including one-time higher costs that impacted margins and are expected to affect short-term profitability.
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Analyst reactions varied: Goldman Sachs maintained a ‘neutral’ rating but reduced its price target to ₹167, citing subdued margin profiles despite revenue recovery.
Nuvama upgraded Zee to ‘buy’ from ‘reduce,’ setting a target price of ₹180, encouraged by the company’s revenue growth and strategic adjustments.
UBS remained ‘neutral’ with a target price of ₹190, emphasizing the company’s potential for sustained growth in subscription revenues and achieving an 18-20% EBITDA margin by FY26.
Citi issued a ‘sell’ call, lowering the target to ₹137 but acknowledged the company’s decent performance in the last quarter.
CLSA upgraded the stock to ‘underperform’ from ‘sell’ with a target of ₹175, optimistic about the company's cost-revision strategies and the achievable target of an 18-20% EBITDA margin by FY26.
Price Action: Zee Entertainment shares were trading 0.99% higher at ₹142.25 shortly after market open on Monday.
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