Despite its strong performance in the recent past, Motilal Oswal Securities have ‘Neutral’ stance on ZEE due to the risk of promoter group losing management control. The current value of shareholding stands at a meager Rs 5,000 crore v/s loan, as against pledged shares at Rs 6,500 crore (post 2.2 per cent sale to Oppenheimer).
This, the analysts say, is important as Zee remains the only consistently profitable company in the broadcasting space spearheaded by the current promoter group.
“The value of the other non-media infra assets too are worsening in the current environment, holding Rs 12,000 crore debts (as of Jan’19) in the operating companies. This could not only reduce the fund raising possibility but also create further debt woes in the operating companies; and peers like Sun TV too are valued at P/E of 12x on FY21E in line with ZEE’s valuation of 11x on FY21E, and therefore, overall industry valuation has reduced making ZEE less attractive compared to peers,” the brokerage firm said in company update.
At 10:00 am, ZEE was trading 7.5 per cent lower at Rs 219 on the BSE, as compared to a 0.26 per cent rise in the S&P BSE Sensex. A combined 16.9 million equity shares changed hands on the counter on the NSE and BSE till the time of writing of this report.