JV unlikely to buttress Zee scrip: Oswal Securities

Yesterday Zee Telefilms and Turner International India (a 100 per cent subsidiary of AOL Time Warner) announced a joint venture with Zee holding a 74 per cent equity stake and Turner holding the balance 26 per cent.

What happened on the bourses following this piece of positive news makes for interesting reading though. The Zee scrip has been in a downward spiral since peaking on 11 December at Rs 151.45. The scrip closed down at Rs 134.35 yesterday and continued its fall to close at Rs 123.75 today.

According to Motilal Oswal Securities though, this movement is not surprising. A report it has prepared states that the core issues dogging Zee remain - that of management quality, transparency, disclosure standards and unauthorised advances to group companies. Zee is also badly in need of funds to repay its debt of Rs 7 billion plus. It needs money for its hybrid fibre coax (HFC) network and acquisition of the last mile too. The number of days debts are outstanding on a consolidated basis has touched 180 days, clearly indicating stress on the business. None of these crucial issues would be addressed by this marketing JV, due to which Oswal Securities remains distinctly cool to these developments.

The report it has prepared further states that prospects of any resurgence driven by content continues to be bleak. Viewership is down significantly, making Zee TV the No 3 Hindi entertainment channel. Zee TV's channel share has slipped to an abysmal 4.4 per cent compared to Sony TV's 8.2 per cent and Star Plus' 19.4 per cent in the prime time slot. Now, the gap with Sony is also increasing continuously and there seems to be no major reversal in sight.

The management owes Zee Telefilms around RS 2.2 billion and there are no evident signs of repayment of the dues coming through. This after having missed the promised deadline several times. Even if the new JV brings along benefits in terms of better acceptance of the bouquet by MSOs, earnings will not get impacted materially over the next 4 quarters.

Oswal Securities expects an EPS of Rs 4.96 in FY02 (a growth of 12 per cent) and Rs 5.95 in FY03 (a growth of 20 per cent).

The stock price has run up from Rs 70 exclusively on the hopes of induction of a strategic partner (AOL Time Warner) in Zee Telefilms at a price of Rs175 plus. This JV with Turner International does not match up to anything close to a strategic stake by AOL Time Warner in Zee Telefilms.

This is a major disappointment for the market after expectations were run up so high. At the current price, the stock quotes at a P/E of 27x FY02 and 22.4x FY03 earnings. With valuations clearly stretched, the stock price will fall from these levels, the report concludes.

Latest Reads
Republic TV, BTVI join hands for budget coverage

MUMBAI: Republic TV, spearheaded by Arnab Goswami, and Business Television India (BTVI) have entered into an alliance for content and programming around Union Budget 2018. The Republic TV- BTVI alliance promises to offer viewers a distinctive experience.

Television TV Channels News Broadcasting
Mairu Gupta and the art of building the NBA in India

MUMBAI: For basketball fans worldwide, the US National Basketball Association (NBA) represents the mecca of the sport. But in India, the NBA has had its task cut out, what with cricket presenting a near impenetrable line of defence.

Television TV Channels Sports
CNN-News18 'Indian of the year' 2017 special Telecast on 9 and 10 December

MUMBAI: The awards night of the annual and flagship initiative of CNN-News18, ‘Indian of the Year – 2017’ will be telecasted on the 9 and 10 of December at 9:30 PM on the channel. The initiative, whichrecognizes and awards the exceptional contribution and achievements of the iconic Indian citizens...

Television TV Channels News Broadcasting
Music channels bet on shows to boost viewership

MUMBAI: Seems like music channels are playing second fiddle to online music platforms when it comes to playing tracks. In an attempt to grab more eyeballs, pure-play music channels on television are moving away from the music content and focusing more on the youth-centric shows.

Television TV Channels Music and Youth
Zee TV leads Hindi GECs in week 48 of Barc ratings

MUMBAI: Zee TV emerged as the leader among Hindi general entertainment channels (urban + rural) dethroning Zee Anmol, according to Broadcast Audience Research Council’s (BARC) all-India data for week 48.

Television TV Channels GECs
Republic TV continues lead as genre ratings rise

BENGALURU:Two of weeks earlier, we had mentioned that the English News genre’s four week average ratings and weekly ratings have been falling since weeks 29 to 32 of 2017. The fall continued until week 47 of 2017 when the combined Broadcast Audience Research Council of India (BARC) weekly ratings...

Television TV Channels News Broadcasting
SPN India acquires TV, OTT rights for T10 Cricket League

MUMBAI: The newly introduced T10 Cricket league (TCL), which will be played at the UAE’s Sharjah Cricket Stadium, will be telecast live on Sony ESPN. The league is a four-day event running from the 14th to the 17th of December 2017.

Television TV Channels Sports
News Corp’s new ad network takes on Facebook, Google

Training its guns at the digital-ad dominance of Google and Facebook, News Corp has launched a platform, News IQ, to let advertisers reach audiences across all of its online properties.

Television TV Channels News Broadcasting
Gracenote launches channel monitoring solution for broadcasters

MUMBAI: Gracenote, a Nielsen company, has launched its next-generation TV distribution monitoring and reporting solution developed specifically for the Indian TV market called TV Street Maps 2.0.

Television TV Channels People

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories