Multi Baggers
Zee Media
BSE ID : 532794 NSE ID : ZEEMEDIA
RECOMMENDED PRICE 12.29
PEAK FROM RECO 50.15 308.06%
CURRENT PRICE 11.11 Resource id #18
Zee media has over 10 regional channels at nascent stage with two main revenue streams coming from ZEE Business and ZEE News. We estimate target price of 22 Rs on the stock.
Zee Media Corporation
Changing structures could lead to valuation upswing
Zee media has over 10 regional channels at nascent stage with two main revenue streams coming from ZEE Business and ZEE News.
Now the company has decided to merge Essel Holdings Pvt. ltd which holds DNA (Daily News and Analysis Newspaper). Court meeting on 21st November for merging the company with self so with merger getting approved there will be valuation catch up
Market Cap to Revenue multiple for all the media companies is anywhere between 2 to 2.5 times. With DNA being included in the ZEE Media group this could lead to valuation upswing
Taking a call on Zee News, if you see the entire business channel, we think Rs 300 crore of market cap is relatively undervalued, given that the revenues are close to Rs 300+ crore. They also operate few other channels in the local geographies through 24 Ghanta and Zee Gantalu , Zee Chattisgarh, Rajasthan UP and others; in total approximately 8-10 channels. Also, they provide content material to Zee Ltd for USA, UK, Euro area and Saudi Arab.
We feel media, as a space, is definitely going to be a promising bet where we have other top picks, given that there is a lot of re-rating that will happen. Even stocks, where there is a strong management involved, will definitely get re-rated in the space. Thus, parking a small fund in this particular stock would make a lot of sense.
ZEE Media consolidate revenue for FY 14 is estimated at 350 crores against market cap of 300 crores. So the valuation multiple can increase the market capitalization. Estimating revenue of 400 crore for FY 15 and multiple to sales at 1.5 times. We estimate target price of 22 Rs on the stock.
Disclaimer: Aashish Tater is an equity analyst and investment consultant based in Kolkata, INDIA. Safe to assume stocks recommended to clients no personal position. At the time of writing this article, he, his firm and dependent family members have no position in the stocks mentioned above. The author invites readers to send him email and welcomes comments, feedback & queries at query@fortunewizard.com. This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information/ article. Aashish Tater website www.fortunewizard.com
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