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Zee Q3 results preview: Profit seen falling 18-21%

ICICI Securities expects Ebitda margins to decline 500 bps to 29.8 per cent.

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Last Updated: Jan 20, 2020, 07.49 PM IST
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NEW DELHI: Zee Entertainment Enterprises (ZEEL) is expected to post disappointing quarterly results on Tuesday due to drop in advertising revenue. Analysts tracking the company see 18-21 per cent year-on-year plunge in profit.

Kotak Securities, which penciled in Rs 412.1 crore profit, said Zee’s operating performance would be disappointing. “We expect a sharp 14 per cent decline in advertising revenue, significant underperformance versus industry growth rate (flattish),” it said.

The broker blamed the likely underperformance on viewership share loss of Zee TV and promoter distractions. However, it said there will be 22 per cent growth in domestic subscription revenue.

Edelweiss Securities said advertising revenue will decline owing to economic slowdown, cutback in spends by large categories (consumer goods, auto, telecom and retail) and withdrawal from the FreeDish platform.

The broking firm expects revenue at Rs 2,067.7 crore, down 4.6 per cent and profit at 425.8 crore, down 18.9 per cent.

ICICI Securities expects Ebitda margins to decline 500 bps to 29.8 per cent on aggressive spend on building content library as well as negative operating leverage due to revenue decline.

The company may report domestic subscription growth at 22 per cent to Rs 633.4 crore driven by NTO tailwinds, said ICICI Securities, adding that international subscription revenue growth may decline sharply by 21 per cent.

Among the key moniterables are reconstitution of the board and concerns raised by outgoing directors, commentary on newly amended tariff order, regional channels launch and ad growth outlook.

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