Comments
Shares of Zee Entertainment Enterprises Ltd plunged as much as 9.6 per cent to Rs 436.05, their lowest since December 2016. Morgan Stanley downgraded the stock to ‘underweight’ from ‘overweight’ and lowered the price target by 33 per cent to Rs 410. It has also cut FY-19/20 EBITDA estimates.
Investments in Zee5 are likely to drag margins in near term with possible break-even only likely by FY25; this could significantly decelerate EBITDA growth and de-rate valuation multiples below long-term historical averages, Morgan Stanley has said.
Zee5 is a video-on-demand website run by Zee Entertainment.
The brokerage believes Zee5 will have to spend disproportionately on high-quality content and distribution costs to drive viewership and compete against large players with both deep pockets and vast video streaming experience.
Zee was the top percentage decliner on the NSE index. The stock was down for the fifth straight session.
The stock posted its biggest intra-day fall since July 2017 and was down 17.1 per cent this year as of last close.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.