Shares of Zee Entertainment Enterprises Ltd. (ZEEL) increased by about 7% during intraday trading on Thursday, March 20, after international stockbroker CLSA issued a bullish outlook. With a target price of ₹170, the firm maintained its ‘outperform’ rating on the stock, suggesting a potential upside of almost 70% from the previous close. According to CLSA, Zee’s stock may double in value over the course of the next 12 to 24 months due to growth fueled by advertising revenue, which might aid in re-rating the stock. Even assuming a modest 6 percent year-on-year (YoY) growth in advertising revenue, the brokerage pointed out that Zee is currently trading at a low price-to-earnings (PE) multiple of 8 times and has the potential to deliver a 22–33 percent EBITDA/PAT compound annual growth rate (CAGR) over financial years 2026–2027.
The brokerage also emphasized Zee’s standing as the second-biggest TV network in India, with its platform, ZEE5, gaining traction in the over-the-top (OTT) market. The company’s EBITDA margin has increased by 9 percentage points from its prior lows, according to CLSA. Zee also has ₹1,700 crore in cash reserves and is debt-free. With a market capitalization to sales ratio of one times, the company is now trading at a substantial 60–80% discount to Sun TV and the Reliance-Disney joint venture.
Promoters Raise Stake, Increasing Investor Trust
Recently, 27 lakh shares valued at ₹27 crore were bought by Zee’s promoters through open market transactions. As a result, the promoters’ stake in the business rose from 3.99 percent to 4.28 percent. In a report released this month, brokerage Nuvama expressed confidence in the company’s long-term growth prospects by citing this rise in holdings. According to Nuvama, this action will increase minority investors’ confidence. The firm also noted that as of Q3FY25, Zee’s subscription revenue has increased for seven straight quarters. Despite the poor advertising revenue, Nuvama anticipates that it would increase starting in Q2FY26, driven by a rebound in urban demand and higher gross margins for FMCG companies as a result of falling crude oil prices. Despite the stock’s appealing value at 10 times PE, which is higher than its one-year average of 14 times, Nuvama kept its ‘Buy’ rating.
Performance of Stock Prices
During the session, Zee Entertainment’s stock surged up to 6.6%, reaching an intra-day high of 106.80 rupees. The stock is still about 37% below its 52-week high of ₹168.70, set in June 2024, despite the rebound. But since hitting its 52-week low of ₹89.29 earlier this month, it has recovered by 20%. The media stock has dropped 29% in the last year. But it has recovered from a three-month losing streak, gaining more than 12 percent in March alone. In February, January, and December, the stock had dropped by 12 percent, 13 percent, and 6 percent, respectively.