Zee News

Current market price: Rs 45.55

Brokerage: Edelweiss Securities

Regional media is expected to grow faster than the overall advertisement industry’s growth rate of 20 per cent (as per FICCI-PwC) and Zee News (ZNL) will be one of the key beneficiaries of this.

ZNL has an attractive bouquet of 10 channels in regional and news genres. Both these genres, which form 44 per cent of the entire TV viewership and 37 per cent of the total ad pie, are currently witnessing an increasing viewership share. Zee Marathi and Zee Bangla have made substantial viewership gains and hold No.1 position in their respective markets. Also, the company’s new launches, namely Zee Telugu (GRP up 97.5 per cent y-o-y) and Zee Kannada (GRP up 200 per cent y-o-y) have garnered good market shares.

ZNL plans to invest Rs 500 crore in a slew of channels over the next three years to expand its presence in regional markets and new segments. The company is in the process of applying to the Information and Broadcasting Ministry for clearance to operate a Bengali movie channel. ZNL is also planning to launch an English business and a global news channel.

ZNL’s ad revenues are expected to grow at a CAGR of 29.4 per cent over FY08-10E. ZNL is currently trading at a P/E of 20.2x FY09E and 14.8x FY10E, which is the lower end of its historic trading band. Recommend Buy.

CMP as on 19 September

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