Shares of Zee Entertainment (ZEEL) declined nearly 2 per cent in Friday’s trade ahead of the company’s financial results for the quarter ended June 30 later in the day.

The scrip traded 1.73 per cent down at Rs 156.25 at around 9.20 am (IST), while the benchmark BSE Sensex was down 0.64 per cent at 37,895 at around the same time.

ICICI Direct sees a 55.50 per cent year-on-year (YoY) fall in profit after tax in Q1FY21 on a 29.30 per cent dip in revenue.

“Zee’s ad revenue is expected to decline sharply by around 60 per cent YoY amid Covid-19 initiated lockdown. We expect EBITDA margins to fall 490 bps YoY to 28 per cent owing to negative operating leverage,” ICICI Direct said.

Market participants should zero in on advertisement recovery, traction in the digital segment and viewership trend.

An assessment by B&K Securities projects a 36 per cent and 44 per cent YoY dip in Zee Entertainment’s EBITDA and PAT, as content cost in the form of amortisation of film rights will persist despite the suspension of TV shows. The brokerage also sees 60 per cent dip in ad revenue due to Covid-19 and subsequent lockdown.