Best large cap - Media and Entertainment - ZEE TV (ZEEL)

Zee Entertainment (Zee) is India’s largest vertically integrated media and entertainment company. It has an integrated range of businesses, encompassing the content-to-consumer value chain of media and entertainment business. The company
owns a bouquet of channels across various genres including general entertainment, cinema, music, news and sports. Zee has aggressive plans in the motion picture business through its subsidiary, Zee Studio (ZES), which works under two banners- Zee Motion Pictures and Zee Limelight. The launch of new general entertainment channels (GECs) has expanded the overall space by 20% YTD; however it has also led to increased fragmentation in the category. As expected, incumbents lost market share, although, new players (Colors) have taken more share than anticipated. Zee has done better than peers with its share coming down by -2.5% compared to -6% for Star (over week 29-36). In terms of number of programs in Top 50, Zee TV has 17 in week 36 (compared with 18 in week 29, before launch of Colors) while Star Plus now has 23 (31 earlier). Zee has done better than peers in protecting market share. One can expect strong growth (29% CAGR for FY2008-20 liE) in ZEEL’s domestic subscription revenues driven by adoption of DTH. ZEEL has a strong bouquet of channels including Hindi GEC (ZTV), Cinema (Zee Cinema), Sports (Ten Sports and Zee Sports) and English (Zee Café and Zee Studio), which will help garner a greater share of subscription revenues from an increasingly-addressable subscriber base. ZEEL has already stated its plans to restructure Zee Next, where it will restrict its investment to Rs200 crore and sell a majority stake to a strategic partner to fund the rest. All these factors make ZEEL the preferred pick in the Media space.

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