Zee Entertainment - Q1FY13 Result Update - Kotak

Zee Entertainment reported a strong set of 1QFY13 financials, beating our estimates on the topline as well as the bottom-line. Advertising revenue growth, driven by strong ratings of key channels, is particularly impressive given weak industry growth in the quarter. Attraction of defensive characteristics of Zee Entertainment (significant subscription revenues stream, large bouquet); and Zee Entertainment is well - exposed to DAS implementation, which would provide another driver of margin expansion. Ratings of flagship channel shall be a driver of the stock in the short-term.

We expect valuations to sustain at high levels on benefits from DAS implementation, earnings visibility, and ratings of the company's key channels (seeing uptrend in near-term). ACCUMULATE, with a price target of Rs 167 (Rs 132 earlier).

Source : Equity Bulls

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