Sharekhan has a buy call on Zee Entertainment Enterprises with a target price of Rs 680.The current market price of Zee Entertainment Enterprises is Rs 550.30.Time period given by the brokerage is one year when Zee Entertainment Enterprises price can reach the defined target."We expect ZEEL to deliver a healthy 30% CAGR in adjusted net profit over FY2018-FY2020E, led by an 18% revenue CAGR.
We continue to remain positive on ZEEL, as it is a structural India media consumption theme, and expect its growth trajectory to improve further in the coming years, as it continues to invest on content for its TV and digital business.
Further, with expected good monsoon, rural economy is poised to do well in CY2018, which in turn will translate into strong ad growth for the media sector, and ZEEL is expected to be among the prime beneficiaries.
The stock has already corrected close to 15% from its 52-week high, factoring weak FCF generation and elevated investment in digital and content.
We maintain our Buy rating with a price target (PT) of Rs 680," Sharekhan said in a report.