LTP: Rs 52.50
M Cap: Rs 1,259cr
Zee News (ZNL) has seen delivery volumes rise 137 per cent with 1,651,205 shares changing hands. The company recently announced a share swap ratio of 4:19 for the transfer of its regional general entertainment channels to Zee Entertainment Enterprises (ZEEL). So, for every 19 shares of ZNL held, four shares of ZEEL will be issued. Also, ZEEL will also assume debt of Rs 120 crore from total net debt of Rs 150 crore on Zee News’ books. According to Vikash Mantri of ICICI Securities, the news business’ profitability is expected to improve in the current fiscal on the back of lower losses from new initiatives due to conversion of the Tamil GEC, Zee Tamizh, into a predominantly news channel. For the September quarter, revenues grew 26.3 per cent y-o-y to Rs 161.2 crore on the back of a 26.4 per cent y-o-y and a 17.3 per cent q-o-q growth in advertising revenues. I-Sec has a ‘Buy’ rating on the stock with a target price of Rs 60, based on Rs 50 a share for the regional channels business (as per the announced swap ratio) and Rs 10 a share for the residual news business based on FYi 1 E EV/ sales of lx.
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