Mehabe score: 5 G Factor: 3 Piotski Score: 8 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 8.
Description
Zee Entertainment Enterprises is mainly in the following businesses: Broadcasting of Satellite Television Channels, Space Selling agent for other satellite television channels, and Sale of Media Content i.e. programs / film rights / feeds /music rights.Site:ZEELMain Symbol:ZEEL
Stock trades at 314.0, above its 50dma 233.21. It also trades above its 200dma 212.85. The stock remains bullish on techicals
The 52 week high is at 362.90 and the 52week low is at 166.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 18.98%
Weakness
– The company has delivered a poor sales growth of 5.87% over past five years.
-Promoter holding is low: 3.98%
– has a low return on equity of 10.13% for last 3 years.
-Promoter holding has decreased over last 3 years: -37.64%
Competition
– The industry trades at a mean P/E of 25.9x. Saregama India trades at the industry’s max P/E of 62.39x. ZEEL trades at a P/E of 30.7x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 8.0. ZEEL has a G-Factor of 3 and Piotski scoreof 8.
– Average 1 month return for industry is -1.2%. The max 1- month return was given by TV18 Broadcast: a return of 6.61 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 1775.0 cr compared to Rs 1312.0 cr for period ended Jun 2020, a rise of 35.3%
Operating Profits reported at Rs 334.0 cr for period ended Jun 2021 vis-vis 108.0 for period ended Jun 2020 .
Operating Margins expanded 1058.5 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 2.23 compared to Rs 2.87 for previous quarter ended Mar 2021 and Rs 0.32 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 8193.0 cr for period ended TTM vis-vis sales of Rs 7730.0 cr for the period ended Mar 2021, a growth of 5.7%. The 3 year sales cagr stood at 1.1%.
Operating margins expanded to 22.0% for period ended TTM vis-vis 21.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 983.0 cr for period ended TTM vis-vis sales of Rs 800.0 cr for the period ended Mar 2021, rising 18.6%.
Company reported a poor Net Profit CAGR of -14.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1548.0 cr for period ended Mar 2021 vis-vis Rs 250.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 8.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 58% on a 1 Year basis vis-vis a return of -11% over the last 3 Years. – The compounded sales growth on a TTM bassis is 10% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is 3632% vis-vis a compounded profit growth of -19% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 57.18% vis-vis 57.46% for Jun 2021 – Public shareholding has risen for the period ended Sep 2021. The Sep 2021 public holding stood at 22.7% vis-vis 19.93% for Jun 2021
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 18.98% – The company has delivered a poor sales growth of 5.87% over past five years.
-Promoter holding is low: 3.98%
– has a low return on equity of 10.13% for last 3 years.
-Promoter holding has decreased over last 3 years: -37.64%
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 233.21 and is trading at 314.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
