Monthly Call

Zee Entertainment Enterprise

CMP: 306
Target 1: 331
Target 2: 342

Current Quote of Zee Entertainment enterprise

Zee TV, with 234 gross rating points (GRPs) in Q1FY08, is now closer to the genre leader Star Plus. Zee TV's market share was 25% during the quarter, up from 23% in Q1FY07; Star Plus 38%; Sony 13%; Sahara One 9% and Star One 8%. Zee TV had a market share of 29% and Star Plus 32% in the week ending July 14, 2007 .

Zee Entertainment Enterprises reported an impressive performance as consolidated operating revenue grew by 35% to Rs 391.60 crore backed by an expansion in advertising revenue by 47% y-o-y to Rs 204.37 crore for the quarter ending June 30, 2007, while subscriptions grew by 27% to Rs 168.09 crore, and other sales and services were up by 9% to Rs 19.11 crore. Operating profit margin improved 770 basis points (bps) to 30.6% and the resultant net profit grew 47% to Rs 77.10 crore.

Zee Cinema also undertook many new programming and marketing initiatives to enhance viewer experience. The June 2007 quarter also showcased a big event – Zee Cine Awards. Zee Cinema achieved a channel share of 31%. Zee Cafe continued its lead over Star World in all-day ratings as well as prime-time ratings across five metros. Zee Cafe commissioned two new shows – Showbiz India Extreme, a variety programme that looks into the lives and times of the Indian diaspora in North America , and Top 10 countdown, listing the best and worst from various categories in fashion, lifestyle, Bollywood, music and luxury. Zee Studio introduced a unique initiative on world cinema, which included all-time great titles including Finally Sunday by Truffaut, Double Life of Veronique by Kieslowski and Twin Peaks by David Lynch. The channel premiered over 40 movies in the quarter. Revenue from the sports business was Rs 34.5 crore. It suffered a loss at EBITDA of Rs 3 crore in the June 2007 quarter.

Going forward, the company has planned to launch a general entertainment youth-based channel, ZeeNext, by January 2008 and is entering into a joint venture with a broadcasting company in the Middle East to launch a movie channel to broadcast Hindi films dubbed in Arabic. Also, Zee Sports would be entering the US market partnering with Dish Network. With growing market share and increasing realizations, expectations are that the company will give good returns going forward.

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