Buy Zee Entertainment Enterprises - Emkay

Reco: BUY
CMP: Rs 219
Target Price: Rs 275

Entering a new orbit, Initiate with BUY

- Broadcasters will be the key beneficiaries of the ongoing digitization with significant jump in subscription revenue and reduction in carriage cost/channel

- Digitization is set to change the revenue model of broadcasters, lending stability through subscription (annuity model) to the erstwhile advertisement (cyclical) driven model

- Improving subscriber declaration, higher revenue share from MSOs, ARPU growth and growth in DTH to trigger a 2.2x jump in Zee's domestic subscription revenue over FY12-15E

- Promising growth drivers with robust financials (Revenue / PAT CAGR of 18%/25% over FY12-15E) to propel Zee in a new orbit. Initiate BUY with a TP of Rs275 (30x PE FY14).

Source : Equity Bulls

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