Result Update: Zee News.
Zee News Ltd has reported a decent set of numbers - revenue growth of 26% YoY, aided by 24% advertising revenue growth and 30% subscription revenue growth. Profitability declined 40% YoY, impacted by new launches. Revenue growth and cost containment likely to help in an adverse macro environment- FY10E.
The prospects of medium term advertising spend trends is not that optimistic, ZNL is likely better off given positioning of strong franchises in regional markets, which are likely to enjoy higher growth rates. Subscription revenues are also now getting meaningful; sustained accelerated growth in this stream will provide a counter cyclical growth opportunity.
Ahead of industry growth rates, healthy financial results and stock outperformance that are in contrast to larger broadcasting peers validate ZNL having been our only preferred pick in the segment, for the last 2Q.
At valuations of 16x FY10E EPS and 10x EBITDA,most of ZeeNews' strong prospects (28% revenue and 19% EPS CAGR over FY08-10E) are in the price.
Investors can wait for more favorable risk-reward to enter the stock.
Zee News Ltd has reported a decent set of numbers - revenue growth of 26% YoY, aided by 24% advertising revenue growth and 30% subscription revenue growth. Profitability declined 40% YoY, impacted by new launches. Revenue growth and cost containment likely to help in an adverse macro environment- FY10E.
The prospects of medium term advertising spend trends is not that optimistic, ZNL is likely better off given positioning of strong franchises in regional markets, which are likely to enjoy higher growth rates. Subscription revenues are also now getting meaningful; sustained accelerated growth in this stream will provide a counter cyclical growth opportunity.
Ahead of industry growth rates, healthy financial results and stock outperformance that are in contrast to larger broadcasting peers validate ZNL having been our only preferred pick in the segment, for the last 2Q.
At valuations of 16x FY10E EPS and 10x EBITDA,most of ZeeNews' strong prospects (28% revenue and 19% EPS CAGR over FY08-10E) are in the price.
Investors can wait for more favorable risk-reward to enter the stock.
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