Analysts Divided on Zee Entertainment After Q1 Results; Motilal Oswal Cuts FY27–FY28 Estimates
Key Takeaways
- •Motilal Oswal reduced its earnings estimates for Zee Entertainment by 24% for FY27 and 14% for FY28 due to a subdued advertising environment and higher content investments.
- •The full financial impact of FIFA subscription packs and associated content costs is expected to be reflected in Zee Entertainment's second-quarter results.
- •Brokerage firms including CLSA and Citi offered differing assessments of Zee Entertainment following its Q1 results, underscoring analyst uncertainty about the company's near-term direction.
- •Zee Entertainment is operating independently after its proposed merger with Sony Group was terminated in January 2024, focusing on cost optimization and content monetization.
- •The broader Indian media sector faces challenges from weakening advertising spend and intensifying digital streaming competition from platforms such as JioCinema and the proposed Reliance-Disney joint venture.
Analysts Divided on Zee Entertainment After Q1 Results; Motilal Oswal Cuts FY27–FY28 Estimates
Zee Entertainment Enterprises (NSE/BSE: ZEE) saw a mixed reception from brokerage houses following its first-quarter financial results, with analysts split on the stock's outlook.
Motilal Oswal
Motilal Oswal noted that the full benefit of the FIFA subscription packs, along with the associated content costs, should be reflected in the second quarter. The brokerage reduced its earnings estimates for Zee Entertainment for fiscal years 2027 and 2028 by 24% and 14%, respectively. The downward revisions were attributed to a subdued advertising environment and higher content investments.
CLSA and Citi
CLSA and Citi also weighed in on Zee Entertainment following the quarterly results, though specific recommendations were detailed separately. The divergence among analysts underscores the uncertainty surrounding the media company's near-term trajectory.
Zee Entertainment Enterprises is one of India's largest media and entertainment companies, operating a wide portfolio of television channels and digital platforms. The company has been navigating a challenging advertising market while investing in content, including sports properties such as FIFA broadcasts. The broader Indian media sector has faced headwinds from softening ad spends across FMCG and other key categories, even as digital streaming competition intensifies with players like JioCinema and the proposed Reliance-Disney joint venture reshaping the competitive landscape. Zee is also in a post-merger phase after its proposed combination with Sony Group, which was called off in January 2024, leaving the company to chart an independent path focused on cost optimization and content monetization.
Source: CNBC-TV18