Shares of Zee Entertainment dropped nearly 1 percent in trade on August 31, after Quant Mutual Fund offloaded 0.5 percent stake in the media company. At 11:51 am the Zee Entertainment stock was trading 0.43 percent lower at Rs 265.05 at NSE.
Details of the stake sale
Quant Mutual Fund sold 48.15 lakh equity shares of Zee Entertainment Enterprises through open market transactions at an average price of Rs 266.61 per share. The stake sale amounted to Rs 128.38 crore.
While the specific reasons behind the stake sale were not provided in the available information, such moves are common in the investment landscape as funds continuously evaluate and adjust their portfolios to optimize returns and manage risks.
Brokerage Views
Brokerage firm Motilal Oswal is bullish on the Zee Entertainment stock and has advised a “buy” rating for the stock in their research report dated August 29, 2023. They’ve set a target price of Rs 320.
Brokerage house Geojit Financial has given a ‘buy’ rating to the Zee Entertainment stock with a target price of Rs 312 in a report dated August 21. The brokerage firm further stated in the report that, “In Q1FY24, ZEEL saw a 7.6 percent YoY rise in operating revenue to Rs. 1,984 crores, driven by strong subscription and other sales revenue. The subscription segment grew 17.6 percent YoY to Rs. 90 crores, supported by post-NTO 3.0 & ZEE5.”
Further, “Other sales surged 42.1 percent YoY to Rs. 135 crore, backed by theatrical revenue. However, ad revenue fell to Rs 941 crore, down 3.5 percent YoY due to subdued corporate ad spending. EBITDA dropped 43.3 percent YoY to Rs 155 crore, with a 680bps YoY margin contraction to 7.8 percent. Despite a 97.0 percent YoY decline in reported profit after tax (PAT) to Rs 4 crore, increased content and technology investment persists.”
Brokerage firm Sharekhan assigned a ‘buy’ rating to the Zee Entertainment stock with a target price of Rs 350 in a report released on August 10. The brokerage firm further stated that, “The merger of Zee and Sony is expected to boost competitiveness, enrich viewer content, and enhance operational and financial performance ahead. Proforma profit after tax (PAT) for the merged entity is projected at Rs 2,484 crore in FY25E and Rs 2,780 crore in FY26E, with outstanding shares totalling 173.6 crore. This corresponds to an EPS of 14.3 for FY25E and 16.0 for FY26E.”
Stock Performance
Zee Entertainment stock has given a return of 36.07 percent over the last six months. The benchmark Nifty50 index has given a return of 11.81 percent over the same duration.