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basant
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   Topic: Zee News – Beyond just news!
Posted: 22/Jan/2007 at 9:17am |
Zee News (CMP Rs 32) seems to be a direct beneficiary of CAS and DTH. The company operates several interesting properties in the news and regional channels genre. Interestingly these spaces are not affected by overcrowding like most of the Hindi news and entertainment channels. The market is new and expanding. Zee News is very well placed to capitalize from the expansion of this market through its various properties as indicated below.
News Channels: |
Nature of revenue |
Market size (Rs crores) |
Audience share |
Competitors |
Zee News |
Pay |
540 |
14% |
Aaj Tak - 20%;
Star News 19%;
NDTV India 13%;
Others 34%
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Zee Business |
Pay |
*** |
21% |
CNBC TV18 30%;
NDTV Profit 29%;
Awaaz 20%
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Regional Channels: |
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Zee Marathi |
Pay |
90 |
47% |
DD10 Sahyadri 10%,
ETV Marathi 43%
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Zee Gujarati |
Pay |
20 |
27% |
ETV Gujarati 57%,
DD11 Gujarati 16%
|
Zee Punjabi |
Pay |
60 |
16% |
ETC Punjabi 73%;
DD Punjabi 11%
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Zee Bangla |
Pay |
120 |
28% |
ETV Bangla 53%;
Aakash 13%;
DD7 Bangla 6%
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Zee Telgu |
Pay |
350 |
4% |
Gemini TV 37%;
Teja TV 21%;
Eanadu TV 19%;
Maa Telugu 9%
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Zee Kannada |
Pay |
130 |
5% |
Udaya TV 47%;
Udaya 2 - 8%;
ETV Kannada 29%
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24 Ghanta |
Free to air |
120 |
31% |
Star Ananda 45%,
Kolkata TV 15%,
Tara News 9%
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Zee Marathi |
Free to air |
*** |
To be launched in February 2007 |
*** The total market size should be more then Rs 100 crores each
While Zee business stacks up quite well in terms of viewer percentage we need to see that most of the viewers in Zee business are from the rural belt mostly looking for information on commodities. The Tv18 and NDTV viewer profile is more from the urban centric higher disposable income bracket so while vieweship may seem very close the advertising rates do differ by quite a lot because of the fundamental difference in viewer profile.
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Financials |
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CMP |
Rs 32.00 |
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Market Capitalization |
Rs 769 crores |
|
Revenues (Fy 07) |
Rs 200 crores |
|
CAGR – 5 years |
30% - 35% |
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Revenues (Fy 12) |
Rs 1000 crores |
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EBIDTA margin Fy 12 |
30% |
|
EBIDTA FY 12 |
Rs 300 crores |
|
EV/EBIDTA |
25 times |
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EV Fy 12 |
Rs 7500 crores |
Now if you see the result there is nothing extraordinary but Subhas Chnadra says that he would take the revenues up from Rs 200 crores in the present year to close to Rs 1000 crores in 5 years. Generally broadcasting companies grow their bottom-line at a greater rate to their top line after the costs have been covered so going by projections that Mr. Chandra has laid down and with the impending digitization of the broadcasting business Zee News should trade at a market cap of about 8-10 times in that period.
Now many would dismiss this as a wait that is too long to happen but we need to look at some specific aspects very closely.
1) Zee News is not a PE/EPS story since the company is still in the investment phase
2) While the stock could move 8-10 times over the next 5 years the biggest call that investors would have to take is whether digitization (CAS, DTH) would be implemented or not. In case digitization is not implemented the returns could drop to market related returns.
With a very high number of pay channels Zee news should be a direct beneficiary of the digitization of TV. While the gains are purely dependent on when CAS is rolled out the downside is and at the current market caps of around Rs 770 crores the stock has a huge potential to perform.
Source: TAM Research data and Company
Edited by basant - 22/Jan/2007 at 9:27am
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chic_1978
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Joined: 10/Aug/2006
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Posted: 22/Jan/2007 at 10:19am |
Basantjee
Zee News has corrected sharply from levels of 58 to 32,
do u feel its a right time to invest in this company ?????
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happy & wise investing
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nikhil090
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Posted: 22/Jan/2007 at 10:30am |
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If we take what Subhash Chandra is saying with a pinch of salt and say that by 2012, it will reach 600 cr instead of 1000 cr, how will the numbers stackup then?
Also, I feel that Zee Business viewership pattern may actually turn out to be an advantage as rural folks may be considered to be more loyal than the urban counterparts.. Also with commodity markets expected to grow, the viewership will also grow..
At this time, it does not seem costly.. When GBN will open with market cap in excess of 900 cr,this would seem a good opportunity.. However, the only negative may be their ability to maintain/increase their market share.. I hope that this current demerger will provide that focus and desire..
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basant
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Posted: 22/Jan/2007 at 10:30am |
Chic: That is why I started this topic.But do not expect any magic in 3 weeks. This is for the big time greedy patient investor.
Edited by basant - 22/Jan/2007 at 10:33am
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vip1
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Posted: 23/Jan/2007 at 12:39pm |
Chic: That is why I started this topic.But do not expect any magic in 3 weeks. This is for the big time greedy patient investor.
Basant,
I guess like us even you are one of the " big time greedy patient investor." No?
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basant
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Posted: 23/Jan/2007 at 12:59pm |
Originally posted by vip1
Chic: That is why I started this topic.But do not expect any magic in 3 weeks. This is for the big time greedy patient investor.
Basant,
I guess like us even you are one of the " big time greedy patient investor." No? |
big time greedy + patient = Long term investor looking for multibaggers
Yes, I am. 
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vivekkumar_in
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Posted: 23/Jan/2007 at 10:09pm |
Basantji,
I hold some ZEETEL, had boughtg it for the demerging story. I wanted to sell it anyway after all the demerging has settled.
Is Zee News a better bet than ZEETEL for 2010 with or without CAS. Can one consider moving completely from ZEETEL to ZEE News ?
Regards,
Vivek
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Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
P Lynch
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basant
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Posted: 23/Jan/2007 at 8:30am |
With CAS Zee news is better without CAS Zee Tel but since you hold a diversified portfolio hold onto both of them along with WWIL.I am getting crazy thinking what broadcasting stocks could do over the next 3-4 years with CAS.
BTW Zee is in for demerger of its DISH business again so the ex price could work out to Rs 275 odd again.
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