Neutral Zee Entertainment Enterprises Ltd For Target Rs.175 - Motilal Oswal Financial Services Ltd
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Zee Entertainment Enterprises Ltd. (ZEE) hosted a conference call on 4th Mar’24 to address ongoing investor concerns. Following are the key points:
* ZEE has established an independent committee to investigate the allegations made against the company or its promoter or key management personnel (KMP). Based on the committee’s findings, the board will take the appropriate actions.
* The management has reiterated that there was no misappropriation of money.
* The company expects improvement in performance in 2HFY25.
Reiterating no misappropriation of funds
* The management has reiterated that there was no misappropriation of funds within the company, and that there were no such findings by the SEBI as well.
* The board has set up an independent investigation committee, led by Mr. Satish Chandra, former judge of Allahabad Court, to look into the allegation made against the company or promoter or KMP.
* Based on the committee’s findings, the board will take appropriate action.
Application to NCLT
* ZEE’s application to NCLT states the grounds for incorrect termination, and emphasizes that it is not the company’s failure.
* There is no likelihood of any other strategic or financial partnerships in the near term.
Expect improvement from 2HFY25 onward
* Business has been impacted by a) Covid, b) industry headwinds led to advertisement slowdown, and c) prolonged merger impacting regular operation and business.
* Weak performance is not a structural issue and the management expects visible improvements in performance in 2HFY25.
* Currently, the company is sitting on a net cash of over INR8b.
Competitive intensity led by Reliance
* ZEE is into entertainment and not into sports; hence, it will focus on increasing the advertisement pie, mostly contributed by FMCG firms.
Change in management
* The company will consider various factors, such as past performance and market share gain, to look for a change in management, if necessary.
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SEBI Registration number is INH000000412
