View on Zee Entertainment: Sony merger gives an altogether different fillip to the business Says Ashwin Patil,LKP Securities
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Below Views on Zee Entertainment By Ashwin Patil, Senior Research Analyst at LKP Securities
Zee's 99.99% of shareholders have given their approval for the Zee Sony merger. That has led to almost an end to the speculations over the deal and crossed the major hurdles. This would make the merged entity the largest media house with a market share above 26%.
Outlook is positive. Ad revenues should increase from here considering pick up in the economy, good monsoons driving rural sales thus in turn elevating the FMCG and Auto verticals, which are their main advertisers. Market share growth happening in Hindi and Marathi GECs should help the cause ultimately. Sony merger gives an altogether different fillip to the business. Subscription business should get a good lift from the final implementation of the NTO2.0 in Q3 post which the linear business along with OTT Zee5 should togetherly provide the required push. We remain BUY on the stock. Shall revisit our numbers post Q2 results.
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