Net sales at the company also declined to Rs. 1112 crore during the review period as against Rs. 1789 crore in the same period a year ago. Total income at the firm also reduced 36.6% to Rs. 1338.41 crore in comparison to Rs. 2112.03 crore in Q1FY20. Revenue from ads also declined 64.5% from Rs 1,186.71 crore in the year ago period to Rs. 421.06 crore.

Revenues from domestic subscription however increased 6.2% year on year, primarily led by Zee5 subscription. As per the company, Covid 19 led restrictions on business activities impacted the company’s results for the just ended quarter. “Like every other business around the world, Zee was also impacted by the pandemic during the first quarter and the impact has been both from the operational and financial perspective,” Rohit Gupta, Chief Financial Officer of the company said.

Already with the easing in lockdown, ad related revenues have seen an improvement and this is expected to grow in the second half of the fiscal year on account of the festive season that kicks in then.

Brokerage bullish on Zee Entertainment

Global brokerage firm CLSA despite the company’s poor show in Q1 retains a ‘buy’ call on the stock with a target price of Rs. 255 per share, implying 38% upside in the counter.

“Zee advertising revenue was in line with expectations, down 66 percent YoY due to COVID-19 lockdowns, but Zee network viewership sharply improved to exceed pre-COVID-19 levels, led by resumed original content. Zee has improved disclosures and should emerge stronger post-COVID-19. At current valuations, the stock offers deep value, in our view,” it said in a report.

On the other hand, Morgan Stanley maintains an ‘equal-weight’ recommendation on the stock and raised target price to Rs. 150 from Rs. 135 earlier. Also, the firm said that its revenue from subscription as well as ad is in line with estimates.

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