Result Update

October 11, 2018

Rating matrix
Rating : Buy Zee Entertainment (ZEEENT) | 464
Target : | 540
Target Period : 12 months
Potential Upside : 15% Strong show; future portends heavy spending
What’s changed?  Consolidated revenue came in at | 1975.9 crore, better than our
Target Changed from | 600 to | 540 estimate of | 1856.8 crore. Domestic ad revenue grew 23.3% (vs. our
EPS FY19E Changed from | 16.4 to | 15.7 expectation of 20% YoY growth) boosted by Zee5 revenues while
EPS FY20E Unchanged overall ad revenue growth was 22.7% YoY (vs. our expectation of
Rating Unchanged 18.1%). On the subscription front, domestic subscription growth came
in at 25.9% YoY (vs. our expectation of 15% YoY) boosted by early
Quarterly performance deal closures and better monetisation of phase III markets.
Q2FY19 Q2FY18 YoY (%) Q1FY19 QoQ (%) International subscription grew 1.9% YoY
Revenue 1,975.9 1,582.1 24.9 1,772.0 11.5  EBITDA came in at | 675.7 crore, better than our expectation of | 594.3
EBITDA 675.7 491.2 37.6 565.7 19.5 crore, growth of 37.6% YoY. Consolidated EBITDA margins came in at
EBITDA (%) 34.2 31.0 315 bps 31.9 228 bps 34.2% vs. our expectation of 32.0%. EBITDA growth was owing to
Adj. PAT 386.7 327.6 18.0 339.4 14.0
operating leverage playing out
Key financials  Reported PAT came in at | 386.7 crore (vs. expectation of | 390 crore)
| Crore FY17 FY18 FY19E FY20E owing to higher than expected tax outgo, with tax rate of ~40.4% vs.
Net Sales 6,434 6,686 7,754 8,806 expectation of ~33.3%
EBITDA 1,927 2,076 2,483 2,906 Strong ad growth; H2 may be relatively softer on high base
Adjusted PAT 1,285 1,393 1,506 1,920
Adjusted EPS 13.4 14.5 15.8 20.0 The quarter was marked by superior domestic ad growth of 23.3%,
largely driven by monetisation of market share gains across genres as
Valuation summary well as marginal boost from Zee5 revenues. We also note that base
FY17 FY18 FY19E FY20E quarter (Q2FY18) was favourable with ad growth of merely ~6%. We note
P/E (Adjusted) 35.0 32.3 29.6 23.4 that the management has reiterated its guidance of beating the expected
Target P/E 40.3 37.2 34.1 27.0 industry ad growth in FY19, albeit H2FY19 growth will be relatively lower
EV / EBITDA 21.4 20.2 16.7 13.8 owing to high base. Going ahead, we build in 16.5% CAGR in ad revenues
P/BV 5.2 4.9 4.3 3.7 in FY18-20E to | 5710 crore.
RoNW 15.0 15.3 14.7 16.0
RoCE 21.2 25.6 24.5 25.5 Early deal closures, phase III rebasing boost subscription growth
Domestic subscription growth, for the quarter, was at 25.9% YoY,
Stock data
boosted by early deal closures and better monetisation of phase III
Particular Amount
markets. Hence, the management indicated that it would now be higher
Market Capitalization (| crore) 44,949.7
than earlier guidance of low teen subscription growth in FY19E.
Total Debt (FY18) (| crore) 1.0
Cash (FY18) (| crore) 1,611.7
Therefore, we build in overall subscription revenue CAGR of 13.1% (vs.
EV (| crore) 43,228.3 ~12.6% earlier given superior domestic subscription traction) in FY18-
52 week H/L (| ) 619/ 458 20E to | 2596 crore.
Equity capital (| crore) 96.0 Zee5 current metric strong; content spending strategy ahead to be key
Face value (|) 1.0
The company also shared Zee5 metric saying it has a monthly active user
Price performance base of 41 million and an average daily time spent of 31 minutes.
1M 3M 6M 12M Notwithstanding Zee’s strong aspirations (~500-600 hours of OTT content
TV Today -15.1 -9.7 -22.5 -0.6 creation over 18 months), we note that OTT competition for Zee includes
Sun TV -12.1 -24.9 -30.5 -23.1 a strong field of players such as Netflix, Amazon Prime, Hot Star and
ZEEL -8.0 -19.9 -24.3 -17.7 Voot, who have kept their offerings strong with high content spending.
Therefore, we believe overall spending in terms of digital content will
Research Analyst restrict the cash generation over the next couple of years.
Bhupendra Tiwary Strong TV segment performance but OTT still black box
bhupendra.tiwary@icicisecurities.com We note that while Zee’s market share gain across genres and bouquet
offering lends it a competitive advantage, the outlook ahead will largely
Sameer Pardikar be led by digital strategy success. The OTT space, nascent currently,
sameer.pardikar@icicisecurities.com warrants a huge content spending strategy and ability to fight out with the
global biggies. While we maintain our BUY rating (given the recent price
correction), we now value the company at 27x FY20E P/E (vs. 30x earlier)
to arrive at a target price of | 540. The lower target multiple is on account
of uncertainty that digital space poses.

ICICI Securities Ltd | Retail Equity Research

Variance analysis
Q2FY19 Q2FY19E Q2FY18 Q1FY19 YoY (%) QoQ (%) Comments
Revenue 1,975.9 1,856.8 1,582.1 1,772.0 24.9 11.5 Domestic ad revenue growth was aided by market share gain while
subscription growth was aided by better monetisation of Phase III subscribers

Other Income 36.9 50.0 188.4 49.8 -80.4 -25.8

Raw Material Expenses 0.0 0.0 0.0 0.0 NA NA
Employee Expenses 168.7 185.7 181.4 171.4 -7.0 -1.6
Admin & Other Expenses 240.0 222.8 189.6 226.5 26.6 6.0
Marketing Expenses 165.1 148.5 141.0 140.2 17.0 17.8
Operational Cost 726.3 705.6 578.9 668.3 25.5 8.7

Other Expenses 0.0 0.0 0.0 0.0 NA NA

EBITDA 675.7 594.2 491.2 565.7 37.6 19.5 The beat at the EBITDA level was largely driven by superior revenues
EBITDA Margin (%) 34.2 32.0 31.0 31.9 315 bps 228 bps
Depreciation 58.8 55.7 41.1 57.6 43.2 2.1
Interest 5.5 5.0 0.3 5.3 1,846.4

Total Tax 262.4 194.3 183.2 207.1 43.3 26.7

Adj. PAT 386.7 390.0 327.6 339.4 18.0 14.0 PAT was lower owing to higher tax outgo, with tax rate of 40.5% vs.
expectation of 33.3%

Key Metrics
Ad Revenue Growth 22.7% 18.1% 2.9% 18.6%
Domestic Subscription % 25.9% 15.0% -13.5% 12.2%
International Subscription % 1.9% 3.0% -16.1% -6.6%
Source: Company, ICICI Direct Research

Change in estimates
FY19E FY20E
(| Crore) Old New % Change Old New % Change Comments
Revenue 7,605.6 7,754.1 2.0 8,720.9 8,806.1 1.0 Re-align our estimates to incorporate H1FY19 performance
EBITDA 2,432.4 2,483.3 2.1 2,877.9 2,906.0 1.0
EBITDA Margin (%) 32.0 32.0 4 bps 33.0 33.0 0 bps
PAT 1,590.3 1,505.7 -5.3 1,922.0 1,920.1 -0.1
EPS (|) 16.6 15.7 -5.3 20.0 20.0 0.0 Earnings for FY19 have ben cut to account for higher tax rate
Source: Company, ICICI Direct Research

Assumptions
Current Earlier
FY16 FY17 FY18 FY19E FY20E FY19E FY20E
Ad Revenue Growth 29.4% 7.1% 14.5% 17.0% 16.0% 15.9% 16.1% Slightly raise our estimates to incorporate strong domestic ad growth
Domestic Subscription % 13.2% 13.0% -10.1% 17.0% 14.7% 14.0% 16.5% Align our estimates in line with management guidance
International Subscription % 6.9% 3.0% -11.5% 0.1% 1.4% -4.1% 5.1%
Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 2

 Company Analysis
Exhibit 1: Ad growth trend

6,000.0 5,710.3 35
28.9 4,921.7
5,000.0 30
4,204.8
3,673.5 25
4,000.0
3,429.6
20

| crore
3,000.0 2,660.3

(%)
2,380.021.2 11.8 17.1 16.0 15
14.5
2,000.0
10
1,000.0 7.1
5
- -
FY14 FY15 FY16 FY17 FY18 FY19E FY20E

Ad revenue Growth
es

Source: Company, ICICI Direct Research

Exhibit 2: Subscription revenue trends

3,000 20.0
2,500 13.8 15.0
12.8 12.5
10.0 10.0
2,000
5.0
| crore

1,500

(%)
-
1,000 2,308 (5.0)
500 (10.0)
2,058 2,263 2,029(10.3) 2,596
- (15.0)
FY16 FY17 FY18 FY19E FY20E

Subscription revenue Growth (RHS)

Source: Company, ICICI Direct Research

EBITDA margins expansion trend to continue

We expect Zee to post an EBITDA margin of 32% and 33% in FY19E and
FY20E, respectively, vs. 31.1% in FY18 as the management has guided
that it would maintain 30%+ trajectory despite digital spends.
Exhibit 3: EBITDA and PAT margins trend
es

35.0
32.0 33.0
30.0 29.9 31.1

25.0 25.7 25.8

20.8 21.8
20.0 20.0 20.0 19.6
17.9
%

15.0
10.0
5.0
-
FY15 FY16 FY17 FY18 FY19E FY20E

EBITDA margin PAT margin

Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 3

 BARC Rating
Maintained leadership in the Marathi market with, on an Exhibit 4: Marathi market
average, 42% market share, while Colors and STAR have 50.0
16.9% and 15.8% average viewership share 45.0
40.0
35.0

Market Share (%)

30.0
25.0
20.0
15.0
10.0
5.0
-

Wk 27

Wk 28

Wk 29

Wk 30

Wk 31

Wk 32

Wk 33

Wk 34

Wk 35

Wk 36

Wk 37

Wk 38

Wk 39
Zee Marathi Zee Talkies Colors Marathi STAR Pravah

Source: Company, ICICI Direct Research

Zee Bangla has taken further lead vs STAR Jalsha with Exhibit 5: Bengali market
41.4% average viewership share 50.0
45.0
40.0
35.0
Market Share (%)

30.0
25.0
20.0
15.0
10.0
5.0
-
Wk 27

Wk 28

Wk 29

Wk 30

Wk 31

Wk 32

Wk 33

Wk 34

Wk 35

Wk 36

Wk 37

Wk 38

Wk 39
STAR Jalsha Zee Bangla Jalsha Movies Colors Bangla

Source: Company, ICICI Direct Research

Exhibit 6: Telugu market

29.0
Zee Telugu is now No 2 player and has taken the lead vs.
other players in the last five to six weeks, surpassing ETV 27.0
Market Share (%)

and Gemini TV
25.0

23.0

21.0

19.0

17.0
Wk 27

Wk 28

Wk 29

Wk 30

Wk 31

Wk 32

Wk 33

Wk 34

Wk 35

Wk 36

Wk 37

Wk 38

Wk 39

STAR Maa ETV Telugu Gemini TV Zee Telugu

Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 4

 Exhibit 7: Kannada Market
40.0
35.0
30.0

Market Share (%)

25.0
20.0
15.0
10.0
5.0

Wk 27

Wk 28

Wk 29

Wk 30

Wk 31

Wk 32

Wk 33

Wk 34

Wk 35

Wk 36

Wk 37

Wk 38

Wk 39
Colors Kannada Zee Kannada Udaya Movies
Udaya TV STAR Suvarna

Source: Company, ICICI Direct Research

Zee Tamil further improved its market share and is No 2 Exhibit 8: Tamil Market
player as far as latest rankings 50.0
45.0
40.0
Market Share (%)

35.0
30.0
25.0
20.0
15.0
10.0
Wk 27

Wk 28

Wk 29

Wk 30

Wk 31

Wk 32

Wk 33

Wk 34

Wk 35

Wk 36

Wk 37

Wk 38

Wk 39
Sun TV STAR Vijay KTV Zee Tamil

Source: Company, ICICI Direct Research

Exhibit 9: Oriya market

Zee Sarthak continued to maintain its strong leadership 50.0
position in the Oriya market with 42% average viewership 45.0
market share 40.0
35.0
Market Share (%)

30.0
25.0
20.0
15.0
10.0
5.0
-
Wk 27

Wk 28

Wk 29

Wk 30

Wk 31

Wk 32

Wk 33

Wk 34

Wk 35

Wk 36

Wk 37

Wk 38

Wk 39

Zee Sarthak Tarang TV Alankar Prarthana

Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 5

Zee Bouquet maintained leadership in Hindi GEC market Exhibit 10: Hindi GEC Market
with 23.4% market share between Zee Anmol and Zee TV 15.0
14.0
13.0

Market Share (%)

12.0
11.0
10.0
9.0
8.0
7.0

Wk 27

Wk 28

Wk 29

Wk 30

Wk 31

Wk 32

Wk 33

Wk 34

Wk 35

Wk 36

Wk 37

Wk 38

Wk 39
Zee Anmol Zee TV Colors STAR Plus
Rishtey Sony Pal

Source: Company, ICICI Direct Research

Exhibit 11: All Genres Market

19.0

17.0

15.0
Market Share (%)

13.0

11.0

9.0

7.0
Wk 27

Wk 28

Wk 29

Wk 30

Wk 31

Wk 32

Wk 33

Wk 34

Wk 35

Wk 36

Wk 37

Wk 38

Wk 39
Sun TV Zee Anmol Zee TV Colors

Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 6

 Conference Call Highlights
 Aiming for 30%+ revenue contribution from Zee5 in the next five
years, planning to launch 60 shows in the next six to nine months: As
per the management, ZEE5 has been the fastest growing digital
entertainment platform and has become the No. 2 platform in India.
The management indicated that they expect 30%+ revenue
contribution from Zee5 in the next five years. The company released
29 original shows on Zee5 till date including two series of its marquee
property Karenjit Kaur – An Untold Story. The management envisaged
production of 600 hours of digital content in the next 18 months
including 60 shows in the next six to nine months. The company
shares that Zee5 has 41.3 million monthly active users (MAU) in
September 2018, up 190% compared to April 2018 while Zee5 users
currently spend an average of 31 minutes per day on the platform,
with ~60% of viewership coming from regional space. As per the
management, cost of producing digital content is 3x that of TV
content. The company launched Zee5 in international markets ex
north America and China on October 2, 2018

 Maintained 30%+ EBITDA margins for FY19 despite digital

investments; inventory investments to be moderate: The
management indicated that despite incremental spending on digital
platform Zee5, they would maintain EBITDA margin upwards of 30%
in FY19. They also indicated that content investment intensity is
expected to taper down in FY19 while movie spending will not be
even half of FY18 levels of ~| 900 crore

 Maintained industry beating ad revenue growth guidance in FY19;

raised subscription growth guidance for FY19: The management
indicated that domestic ad revenue for the quarter was boosted by
viewership market share in some of its key markets as well as some
gain coming in from Zee5. The management guided for industry
beating domestic ad revenue growth in FY19, with mid teen growth in
H2FY19. They indicated that subscription growth for the quarter was
boosted by Zee5 as well as better monetisation, especially in the
phase III markets. The management was also confident of beating its
earlier mid-teen domestic subscription growth guidance for FY19

 Continue to explore partnership with other players in digital

ecosystem; planning to launch new channel in Kerala: The
management indicated that content deal with two large telcos would
be able to get some consumer insights in terms of number of
subscribers accessing their content or average minute per user, etc,
which would be useful for them to fine tune their digital strategy
going ahead. As per the management, they are exploring similar deals
with other telecom operators, broadband service providers and e-
commerce companies. The management indicated they are planning
to launch a new channel ’Zee Keralam’ in December while launch of
movie channels and other regional channels has been postponed to
next fiscal vs. earlier guidance in FY19

 Other highlights: i) The management indicated that it expects to

recover its investment in SGGD sometime in this month wherein it
expects returns of 11% on this investment against original expected
17% returns, ii) The management indicated they have a cash balance
of | 3,000 crore on the books and intends to return anything more
than | 1000 crore to shareholders

ICICI Securities Ltd | Retail Equity Research Page 7

 Valuation
We note that while Zee’s market share gain across genres and bouquet
offering lends it a competitive advantage, the outlook ahead will largely
be led by digital strategy success. The OTT space, nascent currently,
warrants a huge content spending strategy and ability to fight out with the
global biggies. While we maintain our BUY rating (given the recent price
correction), we now value the company at 27x FY20E P/E (vs. 30x earlier)
to arrive at a target price of | 540. Lower target multiple is on account of
uncertainty that digital space poses.

Exhibit 12: Valuations

Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE
(| cr) (%) (|) (%) (x) (x) (%) (%)
FY17 6434.1 10.0 23.1 25.2 19.9 20.9 15.0 21.2
FY18 6685.7 3.9 15.4 -33.4 29.9 19.8 15.3 25.6
FY19E 7754.1 16.0 15.7 1.8 29.3 16.3 14.7 24.5
FY20E 8806.1 13.6 20.0 27.5 23.0 13.6 16.0 25.5
Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 8

Recommendation history vs. consensus
700 100.0
90.0
600 80.0
70.0
500 60.0
(|)

50.0

(%)
400 40.0
30.0
300 20.0
10.0
200 0.0
Sep-15 Dec-15 Feb-16 May-16 Jul-16 Oct-16 Dec-16 Feb-17 May-17 Jul-17 Oct-17 Dec-17 Mar-18 May-18 Jul-18 Oct-18

Price Idirect target Consensus Target Mean % Consensus with BUY

Source: Bloomberg, Company, ICICI Direct Research

Key events
Date Event
Apr-10 The education business undertaking of the company was demerged from the company and transferred to Zee Learn Ltd on the appointed date
Mar-11 Zee Entertainment Studios Ltd, BVI and ZES Mauritius Ltd, Mauritius amalgamated with their holding company ZES Holdings Ltd, Mauritius
Jan-12 Company introduces new Bangla movie channel
Dec-13 Court approves bonus issue of redemable preference shares in the ratio of 1:21
Jun-14 Launches new channel Zee Zindagi, which serves as a platform for global content
Jan-15 Launches new channel & TV
Aug-16 Zee Entertainment enters into definitive agreement to sell its sports business held under wholly-owned subsidiaries viz. Taj TV and Taj Television India Pvt Ltd to
Sony Networks India Pvt Ltd for an all-cash consideration of ~ $385 million (~| 2600 crore). The deal entails a non-compete clause of four years

Nov-16 Zee Entertainment announces the acquisition of the TV business of Reliance Broadcast Network (RBNL), which houses Big Magic (comedy genre GEC) and Big
Ganga (Bhojpuri GEC) for an enterprise valuation (EV) of | 298.4 crore
Source: Company, ICICI Direct Research

Top 10 Shareholders (as on Q1FY19) Shareholding Pattern

Rank Name Latest Filing Date % O/S Position
Position
(m) Change (m) (in %) Sep-17 Dec-17 Mar-18 Jun-18 Sep-18
1 Cyquator Media Services Pvt. Ltd. 30-06-2018 25.1 241.41M 0.0 Promoter 43.07 43.07 41.62 41.62 41.62
2 Essel Group 30-06-2018 16.5 158.35M +0.72M FII 43.85 42.25 41.38 40.77 40.77
3 OppenheimerFunds, Inc. 31-05-2018 7.5 72.40M -0.02M DII 5.83 8.08 10.61 10.93 10.93
4 Life Insurance Corporation of India 30-06-2018 4.9 46.95M 0.0 Others 7.25 6.60 6.39 6.68 6.68
5 Schroder Investment Management Ltd. (SIM) 31-03-2018 2.0 19.05M +0.81M
6 Vontobel Asset Management, Inc. 31-03-2018 1.9 18.30M -6.61M
7 ICICI Prudential Asset Management Co. Ltd. 30-06-2018 1.9 17.75M +1.73M
8 The Vanguard Group, Inc. 31-03-2018 1.7 15.97M -8.70M
9 BlackRock Institutional Trust Company, N.A. 30-06-2018 1.5 14.10M -0.86M
10 Aditya Birla Sun Life AMC Limited 30-06-2018 1.3 12.14M +0.69M
Source: Reuters, ICICI Direct Research

Recent Activity
Investor name Investor name
Buys Sells
ICICI Prudential Asset Management Co. Ltd. +13.77M +1.73M The Vanguard Group, Inc. -76.85M -8.70M
Wellington Management Company, LLP +12.69M +1.44M Vontobel Asset Management, Inc. -58.40M -6.61M
Schroder Investment Management Ltd. (SIM) +7.16M +0.81M BlackRock Institutional Trust Company, N.A. -6.83M -0.86M
Essel Group +5.76M +0.72M Waddell & Reed Investment Management Company -7.81M -0.86M
Aditya Birla Sun Life AMC Limited +5.52M +0.69M AGF Investments Inc. -6.63M -0.73M
Source: Reuters, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 9

Financial summary
Profit and loss statement | Crore Cash flow statement | Crore
(Year-end March) FY17 FY18 FY19E FY20E (Year-end March) FY17 FY18 FY19E FY20E
Total operating Income 6,434.1 6,685.7 7,754.1 8,806.1 Profit after Tax 2,221.7 1,479.1 1,505.7 1,920.1
Growth (%) 10.0 3.9 16.0 13.6 Add: Depreciation 115.2 182.1 232.6 237.8
Operational Cost 2,782.5 2,527.5 2,897.0 3,302.3 Add: Interest paid 137.2 144.8 138.2 131.0
Employee Expenses 604.3 665.7 699.9 792.5 (Inc)/dec in Current Assets -593.1 -1,390.5 -834.9 -643.2
Admin & Other Expenses 673.2 839.0 989.0 1,012.7 Inc/(dec) in CL and Provisions 55.7 358.5 292.2 287.7
Marketing Expenses 447.3 577.3 685.0 792.5 Others 0.0 0.0 0.0 0.0
Total Operating Expenditure 4,507.3 4,609.5 5,270.8 5,900.1 CF from operating activities 1,936.7 774.0 1,333.9 1,933.4
EBITDA 1,926.9 2,076.1 2,483.3 2,906.0 (Inc)/dec in Investments -288.8 -183.2 -550.0 -850.0
Growth (%) 27.6 7.7 19.6 17.0 (Inc)/dec in Fixed Assets -282.6 -346.3 -300.0 -300.0
Depreciation 115.2 182.1 232.6 237.8 Others 597.1 -143.7 -1.9 -2.0
Interest 137.2 144.8 138.2 131.0 CF from investing activities 25.7 -673.2 -851.9 -1,152.0
Other Income 3.6 433.6 286.7 400.0 Issue/(Buy back) of Equity 0.0 0.0 0.0 0.0
Exceptional Items (1,223.4) (134.6) 21.3 - Issue of Preference Shares 193.6 -383.2 0.0 0.0
PBT 2,901.4 2,317.5 2,377.9 2,937.2 Inc/(Dec) in loan funds 0.2 (0.2) - -
Minority Interest (1.2) (1.4) (1.9) (2.0) Interest paid 137.2 144.8 138.2 131.0
PAT from Associates (0.4) 1.2 2.9 1.6 Others -643.2 -863.8 -531.4 -517.0
Total Tax 680.5 840.9 876.9 1,020.8 CF from financing activities -312.1 -1,102.4 -393.2 -386.0
PAT 2,221.7 1,479.1 1,505.7 1,920.1 Net Cash flow 1,650.3 -1,001.6 88.8 395.4
Growth (%) 116.4 -33.4 1.8 27.5 Opening Cash 963.1 2,613.3 1,611.7 1,700.5
Adjusted PAT 1,285.2 1,393.3 1,505.7 1,920.1 Closing Cash 2,613.3 1,611.7 1,700.5 2,095.8
Growth (%) 25.2 8.4 8.1 27.5 Source: Company, ICICI Direct Research
Reported EPS (|) 23.1 15.4 15.7 20.0
Source: Company, ICICI Direct Research

Balance sheet | Crore Key ratios

(Year-end March) FY17 FY18 FY19E FY20E (Year-end March) FY17 FY18 FY19E FY20E
Liabilities Per share data (|)
Equity Capital 96.0 96.0 96.0 96.0 EPS 23.1 15.4 15.7 20.0
Preference Share Capital 1,907.7 1,524.5 1,524.5 1,524.5 Adjusted EPS 13.4 14.5 15.8 20.0
Reserve and Surplus 6,560.8 7,465.7 8,716.4 10,381.4 BV 89.2 94.6 107.6 125.0
Total Shareholders funds 8,564.5 9,086.2 10,336.9 12,002.0 DPS 2.4 3.4 2.7 2.7
Total Debt 1.1 1.0 1.0 1.0 Cash Per Share 5.1 7.0 9.4 11.9
Others 1.0 14.2 12.3 10.3 Operating Ratios (%)
Total Liabilities 8,566.6 9,101.4 10,350.2 12,013.3 EBITDA Margin 29.9 31.1 32.0 33.0
EBIT Margin 28.2 28.3 29.0 30.3
Assets PAT Margin 20.0 20.8 19.6 21.8
Gross Block 1,201.6 1,596.8 1,896.8 2,196.8 Inventory days 95.6 143.5 140.0 130.0
Less: Acc Depreciation 491.8 673.9 906.5 1,144.2 Debtor days 74.1 83.9 83.9 83.9
Net Block 709.8 923.0 990.3 1,052.6 Creditor days 27.7 62.8 62.8 62.8
Capital WIP 127.0 78.1 78.1 78.1 Return Ratios (%)
Total Fixed Assets 836.8 1,001.0 1,068.4 1,130.6 RoE 15.0 15.3 14.7 16.0
Investments 1,593.6 2,056.0 2,606.0 3,456.0 RoCE 21.2 25.6 24.5 25.5
Inventory 1,684.4 2,627.8 2,974.2 3,136.4 RoIC 39.7 34.4 36.0 39.2
Debtors 1,305.9 1,536.5 1,782.1 2,023.9 Valuation Ratios (x)
Loans and Advances 1,082.4 1,340.4 1,554.6 1,765.5 P/E 19.9 29.9 29.3 23.0
Other Current Assets 221.2 179.8 208.5 236.8 EV / EBITDA 20.9 19.8 16.3 13.6
Cash 2,613.3 1,611.7 1,700.5 2,095.8 EV / Net Sales 6.3 6.2 5.2 4.5
Total Current Assets 6,907.3 7,296.2 8,219.8 9,258.4 Market Cap / Sales 6.9 6.6 5.7 5.0
Creditors 489.1 1,149.7 1,333.4 1,514.3 Price to Book Value 5.2 4.9 4.3 3.7
Provisions 85.6 97.5 113.0 128.4 Solvency Ratios
Other current liabilities 895.5 581.6 674.5 766.0 Debt/EBITDA 0.0 0.0 0.0 0.0
Total Current Liabilities 1,470.2 1,828.7 2,120.9 2,408.7 Debt / Equity 0.0 0.0 0.0 0.0
Net Current Assets 5,437.1 5,467.5 6,098.9 6,849.7 Current Ratio 7.5 4.6 4.5 4.4
Other non current assets 699.0 576.9 576.9 576.9 Quick Ratio 4.5 2.5 2.5 2.5
Application of Funds 8,566.6 9,101.4 10,350.2 12,013.3 Source: Company, ICICI Direct Research
.
Source: Company, ICICI Direct Research

The historical numbers have been shown according to the previous reporting standards and have not been reclassified on the basis of the quarterly restated numbers given by the
company. We will restate the numbers once the same is available for all the four quarters of FY16.
ICICI Securities Ltd | Retail Equity Research Page 10
ICICI Direct Research coverage universe (Media)
CMP M Cap EPS (|) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%)
Sector / Company (|) TP(|) Rating (| Cr) FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E
DB Corp (DBCORP) 188 235 Hold 3,462 17.1 15.8 19.4 11.0 11.9 9.7 5.8 6.6 5.1 23.1 23.5 26.6 16.3 16.9 18.8
DISH TV (DISHTV) 55 80 Hold 10,173 -0.4 1.0 2.4 NM 53.9 22.6 9.5 5.4 4.7 3.1 9.2 11.2 0.1 2.8 6.3
ENIL (ENTNET) 626 780 Hold 2,984 7.5 13.7 23.9 83.7 45.6 26.2 25.0 18.5 12.6 6.2 10.3 16.0 3.5 6.9 10.8
Inox Leisure (INOX) 202 275 Buy 1,946 11.9 8.0 12.0 17.0 25.3 16.9 10.6 10.1 7.8 13.2 12.6 15.3 10.6 10.3 13.4
Jagran Prakashan (JAGPRA) 108 185 Hold 3,355 10.6 9.6 9.9 10.1 11.2 10.9 5.1 5.8 5.3 18.9 18.6 18.8 16.1 14.7 14.3
PVR (PVRLIM) 1,253 1,390 Hold 5,854 26.4 33.0 43.1 47.5 38.0 29.1 16.6 14.2 12.1 14.7 15.6 17.8 11.5 12.6 14.3
Sun TV (SUNTV) 639 920 Buy 25,182 28.8 35.7 41.8 22.2 17.9 15.3 11.6 9.2 7.4 35.5 36.7 36.0 24.2 25.0 24.2
TV Today (TVTNET) 390 450 Hold 2,326 19.9 26.6 30.0 19.6 14.7 13.0 10.2 7.9 6.3 30.4 30.9 29.7 19.3 20.0 19.0
ZEE Ent. (ZEEENT) 464 540 Buy 44,601 15.4 15.7 20.0 30.2 29.6 23.2 20.0 16.5 13.7 25.6 24.5 25.5 15.3 14.7 16.0
Source: Company, ICICI Direct Research

ICICI Securities Ltd | Retail Equity Research Page 11

RATING RATIONALE
ICICI Direct endeavours to provide objective opinions and recommendations. ICICI Direct assigns ratings to its
stocks according to their notional target price vs. current market price and then categorises them as Strong
Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is
defined as the analysts' valuation for a stock.

Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;

Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com

ICICI Direct Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com

ICICI Securities Ltd | Retail Equity Research Page 12

ANALYST CERTIFICATION
We /I, Bhupendra Tiwary MBA, Sameer Pardikar, MBA Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately
reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this
report.

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ICICI Securities Ltd | Retail Equity Research Page 13