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Zee5 reported a net profit of Rs. 122 cr. 

Zee5 reported a net profit of Rs. 122 cr. 

Zee5 reported a net profit of Rs. 122 cr. 

Total revenue increased 4% year on year to Rs. 1846Cr.Ad revenue increased 5.4% year on year to Rs970 Cr, while subscription revenue decreased 5.1% year on year to Rs772 Cr. The EBITDA margin was at a multiyear low and declined by 31.5% YoY to Rs236Cr. with a margin of 12.8. The adjusted PAT declined by 45.3% YoY to Rs122 CR. with a margin of 6.6%. ZEE5 revenues declined by 1.1% QoQ to Rs.15 Cr., with global Monthly Average Users and Daily Active Users of 10 Cr. and 1 Cr., respectively. They also launched 38 new shows and movies in 1QFY23, which included 8 originals, and the EBITDA loss stood at Rs. 23Cr.

Current Quarter Operations:

The company launched 26 new shows on linear TV. The TRAI has revised the NTO 2.0 implementation timeline to November 2022. As of June 2022, the outstanding from Dish is Rs. 1900Cr. There are receivables of Rs 35 Cr. outstanding from Siti. In a stable macro environment, the loss of revenue on the withdrawal of Zee Anmol from FTA could be recouped within 1 year through 40% and 60% of subscription and advertisement revenues, respectively. ZEE5 has undertaken a price hike from Rs.499 to Rs.599 in March and then to Rs.699 in July. Around Rs. 25Cr. of the Rs. 37Cr. sequential increase in inventory is related to movies.The over-the-top (OTT) industry is anticipated to expand from Rs 2,590 crore in 2018 to Rs 11,944 crore by 2023, representing a compound annual growth rate of 36%.

The analysis warns that this could result in a recurrence of the 1980s VCR/VCP/DVD boom industry’s abrupt demise, given the exponential growth of multiplexes across metro and urban areas during the early 2000s. In a first-of-its-kind move, renowned OTT platform ZEE5 has collaborated with T-Hub. This is the first time that a streaming platform has joined forces with an innovation project for the promotion of a show. The ZEE5 team was at T-Hub to spread the word about their latest show, Hello World, recently.

Valuations:

The company has reported an EPS of Rs. 1.11 for the period ended June 30, 2022 as compared to Rs. 2.23 for the period ended June 30, 2021. The ROCE and ROE stood at 14.8% and 9.98%, respectively. The stock is trading at a P/E of 26.4x, which is not expensive, and a 5-year P/E of 24.4x. The EBITDA multiple is 13.5x and has an interest coverage ratio of 28.8x. The price to book ratio is at 2.27x, which has a book value of Rs.113. The scrip was trading at Rs.257, up by 2.25% on Tuesday.

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