CLSA has reaffirmed its ‘Outperform’ rating on Zee Entertainment Enterprises Ltd. (ZEEL), setting a target price of ₹170, citing the stock’s extremely attractive valuation and strong earnings recovery potential. The brokerage notes that Zee’s current stock valuation of 8x P/E is significantly undervalued compared to its industry peers.
According to CLSA, Zee’s advertising revenue growth will be the key re-rating catalyst, with the company being India’s second-largest TV network and ramping up investments in OTT platform ZEE5. The brokerage also highlights that Zee’s EBITDA margin has expanded by 9 percentage points from its lows, and the company maintains a healthy balance sheet with zero debt and ₹17 billion in cash reserves.
Even with a conservative 6% YoY growth in advertising revenues, Zee is expected to deliver EBITDA and PAT CAGRs of 22-33% over FY26-27. CLSA believes Zee’s stock is currently trading at a 60-80% discount to the Reliance-Disney JV and Sun TV, implying that Zee’s market cap could double over the next 12-24 months if investor sentiment improves.
About Zee Entertainment:
Zee Entertainment is one of India’s largest media and entertainment conglomerates, operating over 40 television channels, a robust digital platform (ZEE5), and a movie production division. The company has a strong presence in both traditional broadcasting and digital streaming, making it one of the key players in India’s evolving media landscape.