14 December 2017
BSE SENSEX
33,247
S&P CNX
10,252
CMP: INR569
TP: INR690 (+22%)
Zee Entertainment
Update | Sector: Media
Buy
Poised for secular earnings growth
Expect 16% EPS CAGR over FY17-20; maintain Buy
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
Z IN
960.4
596/429
4/5/4
539.8
8.3
1116
56.9
Financials Snapshot (INR b)
Y/E MARCH
FY17 FY18E FY19E
Net Sales
64.3
64.6
74.7
EBITDA
19.3
20.6
24.7
NP
12.9
13.9
16.6
EPS
13.4
14.4
17.3
EPS Gr (%)
52.5
7.9
20.0
BV/Share (INR)
69.3
81.7
95.4
P/E (x)
42.4
39.3
32.8
P/BV (x)
8.2
6.9
6.0
RoE (%)
22.4
19.1
19.6
RoCE (%)
20.7
16.9
18.3
Shareholding pattern (%)
As On
Sep-17 Jun-17 Sep-16
Promoter
43.1
43.1
43.1
DII
6.7
5.7
3.6
FII
43.9
44.7
48.0
Others
6.4
6.6
5.3
FII Includes depository receipts
Stock Performance (1-year)
Zee Entertainmen
Sensex - Rebased
Recovery in the ad market coupled with Zee TV’s improved BARC rating in
Hindi GEC and focus on regional channel bouquet should help the company to
garner higher than industry ad revenue growth.
We expect subscription revenue to grow in mid-teens in FY19/20 – on the
back of gains from digitization and monetization of DAS III/IV markets. TRAI
order should consolidate the market towards top broadcasters.
We expect overall investments of INR7b towards movie/music rights
acquisition and movie production in FY18. RoCE should recover from FY19,
driving healthy FCF.
We believe a secular 16% EPS CAGR over FY17-20 should support the
premium valuations. We maintain Buy, with a revised target price of INR690
(35x December 2019E EPS of INR19.8).
Expect higher-than-industry ad revenue growth
With the impact of demonetization and GST implementation waning, the overall ad
market should see healthy growth from 3QFY18. ZEE’s flagship channel,
Zee TV’s
BARC ratings across Hindi GEC have remained healthy and it has consistently
featured among the top-2 in the last few months. This should support higher-than -
industry ad revenue growth for ZEE. We estimate 15% CAGR in ZEE’s ex-Sports ad
revenue over FY17-20, ahead of KPMG’s estimate of 14% CAGR for the industry.
Subscription revenue growth to remain in healthy mid-teens
ZEE’s subscription revenue has strong growth potential on the back of (a)
digitization, (b) new tariff order, (c) ARPU increase, and (d) improving TV
penetration. Recent results of cable operators indicate healthy ARPU growth, led
by digitization across DAS markets, particularly DAS III and IV. This should translate
into healthy growth for broadcasters like ZEE. If implemented, the recent TRAI
order should further consolidate the market towards top broadcasters, as key
channels, constituting 40-50% of the portfolio, contribute 80-85% of the bouquet
pricing, creating a pull for the rest of the channels in the portfolio. Also, the TRAI
order should increase subscription revenue from cable operators. Further India’s
low ARPU and 71% TV penetration leave healthy growth potential. We expect ZEE’s
ex-Sports subscription revenue to grow at a CAGR of 13% over FY17-20.
600
550
500
450
400
New ventures to begin adding to overall growth in 2-3 years
ZEE’s upcoming digital platform launch,
Z5,
which is expected to offer original as
well as catch-up content, should fill the key gap in its content offerings, attracting
the ‘millennials’ who are moving away from TV viewing. Further, investments in
movie/music rights acquisition and movie production would improve content
Aliasgar Shakir – Research Analyst
(Aliasgar.Shakir@MotilalOswal.com); +91 22 6129 1565
Hafeez Patel – Research Analyst
(Hafeez.Patel@MotilalOswal.com); +91 22 6129 1568
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.

ZEE Entertainment
offerings across genres and expand the target market. As overall investments of
INR7b (INR3.5 in movie/music inventory, INR1.5b in movie production, and INR1.5b
in capex) taper beyond FY19, FCF would improve from INR6b/INR8b in FY18/19 to
INR13b in FY20.
Expect 32-34% EBITDA margin, 16% EPS CAGR over FY17-20
EBITDA margin was subdued in 1HFY18 due to the weak revenue growth, promotion
and marketing expenditure for rebranding
Zee TV,
and intensifying original content
on
Zee TV, &TV
and regional channels. Ex-Sports EBITDA margin declined 140bp YoY
to 31.2% in 1HFY18. We believe, EBITDA margin should expand 180bp to 33% in
FY19 and 80bp to 33.8% in FY20, as (a) ad recovery in 2HFY18 should drive operating
leverage, (b)
&TV
should turn profitable from 4QFY18 (management guidance), (c)
heavy opex related to rebranding of
Zee TV
will be behind, and (d) significantly
improved ratings of
Zee TV
should drive pricing.
Maintain Buy with a revised target price of INR690
The stock has languished at ~INR550 for the last 12 months, during which
demonetization and GST implementation impacted earnings. We expect healthy
growth in 2HFY18, driven by ad market recovery and ZEE’s strong viewership share
across segments. RoCE should increase to 18% in FY19 and 20% in FY20 after falling
in FY18 on higher investments. RoIC of 27% in FY18 should also improve to 31% by
FY20. We have raised our EPS estimates by 19% for FY18 and by 8% for FY19. This is
driven better 40bp improvement in EBITDA margin and expectation of preference
share repayment in mid-FY19 as ZEE has hinted at early repayment. We maintain
our
Buy
rating, with a revised TP of INR690 (35x December 2019E EPS of INR19.8).
ZEE remains the best play in the media industry, with ZEE high growth visibility
driven by continuous widening of target market (new channel/genre, verticals like
Music). Recovery in ad growth coupled with improving RoCE should support
premium valuation of 35x v/s 3-year average one-year forward P/E of 42.4x.
14 December 2017
2

ZEE Entertainment
Strong viewership to steer ad revenue growth
With the impact of demonetization and GST implementation waning, the overall ad
market should see healthy growth from 3QFY18.
BARC ratings across Hindi GEC for ZEE’s flagship channel,
Zee TV
have been healthy; it
has consistently featured among the top-2 in the last few months.
This, coupled with focus on regional channel bouquet, higher original content driven
by fiction and movie acquisitions, expansion into new markets like Kerala and Punjab,
and entry into new genres in existing regions should support above-industry growth
over the next 2-3 years.
We expect ex-Sports ad revenue to grow at 15% CAGR over FY17-20, better than
KPMG’s 14% growth estimate for the industry.
Our recent channel checks with broadcasters, ad planners and marketing/sales
personnel indicate that the GST-led impact is subsiding. More encouragingly, ad
growth is showing signs of strong recovery, with the onset of the festive season
across media verticals. New launches in the FMCG, auto and consumer durables
segments have increased ad spending.
Exhibit 1: Network share across broadcasters* (2QFY18, %)
18.3
32.3
17.9
9.7
9.7
Zee
Star
Sun
Sony
Viacom
12.1
Others
2011
2012
2013
2014
2015
2016
2017
(YTD)
11.6
13.1
Ad revenue growth to rebound from 2HFY18
Exhibit 2: ZEE – steady rise in viewership share (%)
14.9
17.1
16.4
17.7
14.1
* Network share excludes News and sports channels
Source: MOSL, Company
Source: MOSL, Company
Exhibit 3: Indian ad industry size (INR b)
TV
Print
Digital Advertising
OOH
Radio
36
36
174
255
298
42
41
227
276
296
48
46
295
Exhibit 4: Indian ad industry mix (%)
TV
4
6
5
46
4
6
7
46
Print
4
5
8
45
4
5
11
43
Digital Advertising
4
5
13
40
4
5
15
38
4
5
17
36
OOH
4
5
19
34
4
5
22
32
Radio
4
4
24
30
4
27
27
4
12
18
15
139
116
13
18
22
150
125
15
19
30
163
136
17
22
44
176
155
20
24
60
189
181
23
26
77
201
201
26
29
102
215
225
31
33
134
233
257
343
394
39
38
37
37
38
38
38
37
37
37
37
Source: FICCI-KPMG 2017, MOSL
Source: FICCI-KPMG 2017, MOSL
14 December 2017
3

ZEE Entertainment
Exhibit 5: TV ad revenue to witness 14% CAGR over 2016-
21E (INR b)
343
394
Exhibit 6: TV reach outpacing other mediums (m)
702
549
450
282
155
116 125 136
181 201
225
257
298
Television -
weekly
Source: FICCI-KPMG 2017, MOSL
Television -
daily
Digital -
monthly
Print - daily
Source: MOSL, Company
Exhibit 7: Category-wise ad contribution (2016, INR b)
51%
12%
Revenue (INR b)
8%
Revenue share (%)
12%
Exhibit 8: Category-wise ad growth in 2016 (%)
8%
26%
6%
5%
-34%
3%
-11%
0%
4%
14 8
4%
8
3%
6
3%
5
2%
4
97
23
23.2
Source: Pitch Madison Report 2017, MOSL
Source: Pitch Madison Report 2017, MOSL
Exhibit 9: ZEE’s ad revenue growth tracking HUVR’s ad spends (YoY, %)
60.0
HUVR (%)
Zee (%)
24.0
22.7
21.2
11.8
26.5
11.8
7.2
FY15
9.2
15.6
-7.3
-4.7
-7.0
FY16
-3.6
FY17
FY11
FY12
FY13
FY14
Source: MOSL, Company
Maintaining strong viewership share in Hindi GEC
In the Hindi GEC market,
Zee TV
and
Zee Anmol
are seeing their best run in terms of
viewership. In the urban market,
Zee TV
has remained among the top-2 channels in
the last couple of months, with 14-15% market share according to BARC; in the pay
TV category, it has consistently clocked a healthy 18-20% market share in the last 2-
3 months. In the rural market,
Zee Anmol
has maintained a lead – its market share
has consistently been significantly above other channels. With 2-3 shows of
Zee
TV/Zee Anmol
featuring in the top-5 shows in the Hindi GEC market, ZEE has
consistently remained in a strong position over the last few months.
14 December 2017
4

ZEE Entertainment
Increase in original fiction content to help maintain healthy ratings
ZEE’s content production across all channels has increased from 250 hours to 400
hours per week.
Zee TV’s
original programing hours have increased to ~27.5 hours,
which the management plans to take to 30 hours by 3QFY18 and 32 hours by
4QFY18 (was >30 hours in FY16, but fell to <30 hours in FY17). The strategy is to
build fiction content, which creates sticky viewership; other broadcasters are
creating high-cost reality content, viewership of which is volatile. The share of
&TV
has remained stagnant at ~6% in the urban market; its original content is at 26 hours
per week. The management has significantly revamped
&TV’s
content, which should
improve its viewership share – it needs 10% share to become profitable.
Exhibit 10: Zee TV maintained healthy viewership in Hindi
GEC Urban (weekly)
Star Plus
22%
18%
14%
10%
6%
2016
2017
Source: BARC, MOSL
Colors
Zee TV
Sony Entertainment
30%
26%
22%
18%
14%
10%
2016
2017
Source: BARC, MOSL
Exhibit 11: 18-20% viewership share in Pay TV Hindi GEC
Urban (weekly)
STAR Plus
Zee TV
Colors
Sony Entertainment
Exhibit 12: Leader in Hindi GEC Rural (weekly’)
Zee TV
Rishtey
30%
23%
15%
8%
0%
2016
2017
Source: BARC, MOSL
Zee Anmol
Sony Pal
STAR Utsav
Star Bharat
Exhibit 13: Unmatched viewership in FTA Hindi GEC Rural
(weekly)
STAR Bharat
STAR Utsav
Zee Anmol
Rishtey
Sony Pal
40%
30%
20%
10%
0%
2016
2017
Source: BARC, MOSL
Regional focus to improve market share
In line with the strategy for
Zee TV,
in the regional markets too, ZEE is focusing on
higher original fiction content and expansion of movie library to drive ratings. We
believe nearly one-third of ZEE’s ad contribution comes from regional markets,
making these markets key to its growth. The South being a movie consumption
market, the management is investing in creating a strong movie library for
sustainable growth. In five of the six regional markets, ZEE is among the top-2. In
Telugu, its focus is to improve rural viewership. In Bengali, the management targets
to reduce the gap from number-2 to close to number-1 by investing in content.
Though in Tamil Nadu, ZEE is a distant number-3, its market share has improved
from 5% to 13% in the last 18 months. It targets to increase original content from 60
14 December 2017
5

ZEE Entertainment
hours to 75 hours per week by the end of FY18 and expand its movie library to
match larger peers like Sun TV to attract viewership. As the cost of regional content
is one-fourth the cost of Hindi GEC content, this is unlikely to significantly impact
content cost.
Exhibit 14: Undisputed viewership in Marathi (weekly)
60%
45%
30%
15%
0%
2016
2017
Source: BARC, MOSL
Zee Marathi
Star Pravah
Colors Marathi
Zee Talkies
60%
45%
30%
15%
0%
2016
2017
Source: BARC, MOSL
Exhibit 15: Zee’s command in Oriya market (weekly)
Zee Sarthak
Alankar
Tarang TV
Odisha TV
Exhibit 16: Zee stands 2 in Bangla (weekly)
STAR Jalsha
Jalsha Movies
Zee Bangla Cinema
ZEE Bangla
Colors Bangla
nd
Exhibit 17: Zee stands 2 in Kannada (weekly)
Colors Kannada
Star Suvarna
Zee Kannada
Udaya Movies
Udaya TV
nd
60%
45%
30%
15%
0%
40%
30%
20%
10%
0%
2016
2017
2016
2017
Source: BARC, MOSL
Source: BARC, MOSL
Exhibit 18: Zee stands 4 in Tamil (weekly)
Sun TV
72%
54%
36%
18%
0%
2016
2017
Source: BARC, MOSL
KTV
STAR Vijay
Zee Tamil
th
Exhibit 19: Zee stands 2 in Telugu (weekly)
30%
26%
22%
18%
14%
2016
2017
Source: BARC, MOSL
Gemini TV
Zee Telugu
ETV Telugu
STAR Maa
nd
14 December 2017
6

ZEE Entertainment
Foray into newer markets and additions to existing regional portfolio
augurs well
ZEE is looking to expand in new genres (like movies) in its existing regional markets
to increase its target segment. Further, it plans to expand in two key gap markets –
Kerala and Punjab. The size of the Kerala ad market is ~INR5.4b (Pitch Madison,
CY16); Punjab could be slightly smaller. The management is exploring organic and
inorganic avenues. In Punjab, ZEE recently acquired 9X Media’s music channel,
which should offer inroads. It plans to add movie channels in existing regional
markets where it already has GEC presence. This should enable ZEE to widen its
offerings and viewership.
Exhibit 20: Hindi GEC leads overall TV revenue market with ~27% share (2016, INR b)
Revenue (INR b)
27%
53
11%
20
10%
18
8%
19
5%
10
5%
9
Revenue share (%)
4%
9
4%
8
4%
7
3%
6
3%
6
Source: Pitch Madison Report 2017, MOSL
Exhibit 21: Broadcasters’ presence across genres (number of channels)
Genre
Hindi GEC
News
Tamil
Sports
Marathi
Telugu
Hindi Movies
Bangla
Kannada
Music
Malayalam
Kids
Infotainment
English Movies
English GEC
Urdu
Oriya
Gujarati
HD Channels
Total
Star
3
2
4
1
4
3
2
2
2
3
1
4
2
2
Zee
4
1
5
3
2
5
2
1
2
1
7
3
1
1
1
1
2
1
1
1
2
3
3
6
2
1
1
1
15
53
Sony
3
Viacom18
2
14
Sun*
7
6
5
2
1
1
1
1
9
35
27
62
11
29
8
33
* News, Music and Kids have been classified under regional channels
Source: MOSL, Star, Viacom 18, Sony, SUN, Company
14 December 2017
7

ZEE Entertainment
Exhibit 22: 9XM stands 3 in Music genre (weekly)
Mastiii
Sony Mix
32%
24%
16%
8%
0%
2016
2017
Source: BARC, MOSL
9XM
B4U Music
9X Jalwa
60%
45%
30%
15%
0%
2016
2017
Source: BARC, MOSL
nd
Exhibit 23: Malayalam viewership share (weekly)
Asianet
Surya TV
Flowers TV
Mazhavil Manorama
Launched in March 2015,
&TV
is in its third year. The management had guided
breakeven in 3-5 years. We surmise ZEE would be incurring about INR8b in
operating cost and earning revenue of about INR7b, annually. The management has
indicated that
&TV
should break even by 4QFY18. Typically, 10% viewership share
drives EBITDA breakeven.
&TV’s
viewership share has remained stubborn at 6%. The
recent rejig in programming could help improve viewership, but an increase in
original programming from the current 26 hours per week might also be necessary.
Exhibit 24: &TV viewership share has remained at 6% (weekly)
7.0%
6.3%
5.5%
4.8%
4.0%
2016
2017
Source: BARC, MOSL
&TV
&TV on track to achieve breakeven target
14 December 2017
8

ZEE Entertainment
Higher subscription revenue share out of the total TV pie
to propel growth
ZEE’s subscription revenue has strong growth potential, given (a) digitization, (b) new
tariff order, (c) ARPU increase, and (d) improving TV penetration.
Recent results of cable operators indicate healthy ARPU increase, led by digitization
across DAS markets, particularly DAS-III and DAS-IV. This should translate into healthy
growth for broadcasters like ZEE.
If implemented, the recent TRAI order should further consolidate the market in favor
of top broadcasters. Their key channels, constituting 40-50% of the portfolio, account
for 80-85% of the bouquet pricing, creating a pull for the rest of their channels. Also,
the order should increase subscription revenue from cable operators to bring parity
with DTH players’ content cost.
India’s low ARPU and 71% TV penetration leaves healthy growth potential. We expect
ZEE’s ex-sports subscription revenue to grow at 13% CAGR over FY17-20.
Exhibit 25: Broadcasters’ share of subscription revenue to rise
TV industry subscription revenue (INR b)
23
25
23
24
25
26
Broadcaster share (%)
27
28
29
30
22
22
187
213
245
281
320
361
387
426
494
579
672
771
Source: FICCI-KPMG reports, MOSL
TRAI order not a big risk for broadcasters
Even as the operating environment for the industry is expected to change as we
await the High Court’s verdict on TRAI’s tariff order, the management is confident of
early teens growth in subscriber revenue over the next 2-3 years. Recent tariffs of
ZEE’s portfolio of channels indicate that there will be limited impact on large
broadcasters, though smaller broadcasters may be forced to turn their channels into
free-to-air (FTA).
TRAI Tariff order compelling broadcasters to offer a-la carte offerings
Order requires broadcasters to offer their pay channels on an a-la-carte basis. They
have to declare the monthly maximum retail price (MRP) of the channel with the
condition that no pay channel which is a part of a bouquet is priced above INR19.
Free-to-air (FTA) and pay channels have to be segregated in different bouquets with
the MRP of a pay channel bouquet being not less than 85 per cent of the a-la-carte
cost of all the pay channels forming it.
14 December 2017
9

ZEE Entertainment
Large broadcasters’ bouquet based offerings to prevail
In line with the earlier pricing model, where low-viewership channels were clubbed
with larger channels in a bouquet, ZEE’s revised channel pricing indicates that in a
typical bouquet, 30-50% of channels (part of the top 4-5 channels in respective
categories) account for 80-85% of the cumulative a-la-carte pricing. Hence, the
consumer is likely to continue to opt for a bouquet which is at 15% discount to a-la
carte pricing (getting rest of the channels complementary through bouquet). Smaller
broadcasters with no pull channels may be forced to convert to FTA. Though the
subscription revenues for ZEE’s lower-rating channels like
&TV
may be at risk,
requiring investments in content and marketing to improve viewership, the
management is confident that it would be able to effectively market
&TV.
Exhibit 26:
Zee channels: Bouquet v/s a-la-carte prices comparison (INR)
Hindi Bouquet
SD
Zee TV
12.0
&TV
6.0
Zindagi
0.5
Zee Cinema
9.0
& Pictures
6.0
Zee Classic
0.5
Zee Action
0.5
Zee Madhya Pradesh Chhattisgarh 0.2
Zee Punjab Haryana Himachal
0.2
Zee Rajasthan News
0.2
Zee Business
0.5
Zing
0.5
Living Foodz
2.0
Zee ETC
0.5
Total
38.6
Bouquet
33.0
Discount
-15%
HD
16.0
8.0
0.5
12.0
8.0
0.5
0.5
0.2
0.2
0.2
0.5
0.5
2.0
0.5
49.6
42.2
-15%
Marathi
Zee TV
Zee Cinema
Zee Marathi
Zee Talkies
Zee Yuva
Zee 24 Taas
Zee Business
Living Foodz
&TV
& Pictures
Zee ETC
SD
12.0
9.0
14.0
6.0
2.0
0.2
0.5
2.0
6.0
6.0
0.5
HD
16.0
12.0
18.0
8.0
2.0
0.2
0.5
2.0
8.0
8.0
0.5
Bangla
Zee TV
Zee Cinema
Zee Bangla
Zee Bangla Cinema
24 Ghanta
Zee Business
Living Foodz
SD
12.0
9.0
10.0
6.0
0.2
0.5
2.0
HD
16.0
12.0
14.0
6.0
0.2
0.5
2.0
Total
Bouquet
Discount
58.2
50.0
-14%
75.2 Total
64.0 Bouquet
-15% Discount
39.7
50.7
34.0
43.1
-14% -15%
Source: MOSL, Company
Exhibit 27:
Zee channels: Bouquet v/s a-la-carte prices comparison (INR)
Oriya
Zee TV
Zee Cinema
Zee Kalinga
Sarthak TV
Zee Business
Living Foodz
Total
Bouquet
Discount
SD
HD
12.0 16.0
9.0 12.0
0.2
0.2
14.0 14.0
0.5
0.5
2.0
2.0
37.7 44.7
32.1 38.0
-15% -15%
Telugu
Zee TV
WION
Zee Telugu
Zee Cinemalu
Zee Tamil
Total
Bouquet
Discount
SD
12.0
0.5
10.0
5.0
6.0
HD
16.0
0.5
10.0
5.0
6.0
Kannada
Zee TV
WION
Zee Kannada
Zee Tamil
South
Zee TV
WION
Zee Telugu
Zee Cinemalu
Zee Kannada
Zee Tamil
28.5 32.5 Total
24.3 27.7 Bouquet
-15% -15% Discount
SD
12.0
0.5
10.0
6.0
HD
16.0
0.5
10.0
6.0
SD
HD
12.0 16.0
0.5
0.5
10.0 10.0
5.0
5.0
10.0 10.0
6.0
6.0
43.5 47.5
37.0 40.4
-15% -15%
33.5 37.5 Total
28.5 31.9 Bouquet
-15% -15% Discount
Source: MOSL, Company
Digital cable ARPUs to grow
If the TRAI order gets implemented, ARPUs from cable operators should increase, as
they pay significantly less than DTH operators. Recent results of DEN and Siti Cable
hint that cable operators have received healthy ARPU increases across DAS markets,
particularly in Phase III and IV markets, on the back of digitization. This should
support healthy subscription revenue growth for broadcasters like ZEE. Further this
should also improve HD penetration supporting ARPU growth.
14 December 2017
10

ZEE Entertainment
Digitization, low TV penetration and ARPUs remain key levers
ZEE’s subscription revenue has strong growth potential on the back of (a) increasing
TV penetration, (b) ARPU increase, and (c) digitization. KPMG estimates TV
penetration in India at 71%, that is, 181m of the overall 255m households. If we
exclude Free Dish and others, pay TV households stand at 147m, 81% of the total TV
households, and are expected to increase to 171m, offering room for growth.
Further, India’s low ARPUs of just USD3/month are miniscule in comparison to
global TV ARPUs, offering significant room for growth.
Exhibit 28: Significant room for Indian TV penetration (%)
99%
98%
97%
95%
95%
89%
80%
Exhibit 29: Pay TV penetration to reach 84% by 2021E
Total HH (m)
Pay TV HH (% of TV HH)
TV HH (% of total HH)
75%
64%
78 74 78 78 79 81 83 83 81 80 81 82 83 84
69 70 71 72 72 73 73 72
61 63 65 67
56 58
218 222 226 231 235 240 245 250 255 260 265 270 275 281
Source: MOSL, Company
Source: MOSL, FICCI-KPMG reports
Exhibit 30: Huge upside for Indian TV industry ARPU
(USD/month)
88
48
12
22
31
32
Exhibit 31: Digital/DTH ARPU to rise at 11%/9% CAGR (INR)
2016
368
217
255
2021(E)
400
3
6
Digital Cable
Source: MOSL, Company
DTH
Source: FICCI-KPMG 2017, MOSL
Phase III digitization is not fully captured in terms of revenue growth. While Phase III
digitization is largely done, a large part of the monetization remains. Distributors are
delaying contract renewal, awaiting High Court verdict on TRAI’s tariff order. Further
consolidation in DTH market (Dish TV-Videocon merger) bodes well; a concentrated
market will support faster ARPU growth than a fragmented market.
Not aggressively chasing FTA market
Chasing FTA ad revenue at the cost of pay TV subscription unfavorable
For broadcasters, we believe chasing advertisement revenue from the FTA market is
not favorable. Their loss of subscription revenue share from DD Free Dish
subscribers is INR3.8b higher than the corresponding FTA ad market opportunity.
This would increase to INR13.3b, if the remaining Phase-IV analog subscribers shift
to DD Free Dish. Assuming a monthly ARPU of INR150, at current 25m DD Free Dish
14 December 2017
11

ZEE Entertainment
subscribers, the market size is INR45b. Assuming 25% broadcasters’ share, the
subscription revenue loss due to Free Dish subscribers works out to INR11.2b.
Against this, the FTA market excluding auction price would be ~INR8b (as per FICCI-
KPMG 2017 report) – a shortfall of INR3.8b. We understand there are 40m-45m
analog subscribers in Phase-IV. If the broadcasters’ FTA content adds 30m analog
subscribers to DD Free Dish, they could lose INR24.8b subscription revenue. Against
this, even if the FTA ad market jumps 50%, it would still imply INR13.3b deficit.
Economics do not favor chasing FTA ad revenue at the cost of Pay TV subscription.
Exhibit 32:
Economics do not favor chasing FTA ad revenue (INR m)
2017
FTA ad market
Carriage fee
Net FTA market size
Loss of subscription revenue
DD Freedish Subscribers (m)
ARPU loss p.a (INR)
Total market size
Broadcaster's share (%)
Broadcaster's share (INR m)
Net Loss
10,000
2,500
7,500
2017
25
1,800
45,000
25%
11,250
-3,750
Case 1
12,000
2,500
9,500
Case 1
40
1,800
72,000
25%
18,000
-8,500
2019-20E
Case 2
14,000
2,500
11,500
Case 2
55
1,800
99,000
25%
24,750
-13,250
2019-20E
Source: FICCI-KPMG 2017, MOSL
FTA a platform to attract pay TV subscribers
From our recent interactions with multiple broadcasters, we understand that larger
broadcasters are using FTA as a catalyst to capture eyeballs and increase sampling.
The intent is to eventually convert FTA subscribers into pay TV subscribers. In the
recent FICCI Frames 2017 conference, Viacom 18 mentioned that 7% of FTA
subscribers are moving to pay TV, as India adds more TV households. Also, given the
variety of content, we do not expect pay TV subscribers to switch to FTA.
ZEE remains disciplined to restrict FTA cannibalization
ZEE restricts FTA content – it allows its serials/movies on FTA with a lag of 1-1.5
years and does not offer original, reality content. Unlike ZEE, other broadcasters like
Star, Sony and TV18 have been aggressive in their FTA content offerings. Star has re-
launched
Life OK
as
Star Bharat,
offering original content to improve its low ratings.
Similarly,
Sony Pal
too has been offering latest pay TV content on FTA. Movie
channels have also been offering pay TV movies on FTA with a short time gap. Yet,
ZEE commands a healthy rating for its FTA channel,
Zee Anmol,
as FTA subscribers,
who have not viewed pay TV content, do not differentiate between pay TV and FTA
content (original or pay TV repeat). Management continues to remain rational
limiting original content or shorten the pay TV content for its FTA channels.
Additionally, if the consumption moves from Pay TV to Free Dish, Zee being a
content company can evaluate the best monetization opportunity whether it is
subscription or ad revenue.
14 December 2017
12

ZEE Entertainment
Focus on digital only/first content to target different viewership on OTT
To consolidate its position in the digital space, in line with other broadcasters like
Star and Sony, ZEE is likely to launch
Z5,
refreshing its current OTT platform (Ditto TV
and OZEE) in 2HFY18.
Z5
will adopt a consolidated AVOD (advertisement video on
demand), SVOD (subscription video on demand) and TVOD (transaction video on
demand) model, providing free, paid and sachet-based content, respectively.
Z5
will
roll out digital-first as well as exclusive content. The management plans to also add
regional language and movie library content to further widen the portfolio.
Exhibit 33: OTT video platforms in India
Platform
You Tube
Hotstar
Jio Play
Voot
Amazon Video
TVF Play
Netflix
Sony LIV
OZEE TV
Ditto TV
Viu
Eros Now
Business Model
Ad-funded UGC
Freemium
AVOD
AVOD
SVOD
AVOD, sponsored content
SVOD
Freemium
AVOD
Freemium
Freemium
Freemium
20
99
50
Source: FICCI-KPMG 2017, MOSL
500
50
~42
199
Subscription Price (INR/mth)
Digital foray with launch of Z5 to complete the jigsaw
OTT – threat or opportunity?
The key difference in OTT usage since 2-3 years ago is that unlike previously, where
OTT was largely seen as catch-up TV by both broadcasters as well as consumers,
now there is new audience for OTT, which has given rise to digital-first and exclusive
content, thanks to the likes of Netflix and Amazon.
Data price reduction and significant increase in OTT usage have led to increased
consumption on digital platform. However, this hasn't impacted TV viewership. ZEE
sees the digital segment as a growth opportunity and not a cannibalization threat.
Earlier, commuters read newspapers while travelling; they are now increasingly
consuming digital content on their mobile devices – the shift towards OTT is largely
coming at the cost of print media. Or, single-TV homes have moved to OTT usage as
a second TV alternative. Also, in the US, the shift from TV to digital reduced
consumer cost; however, in India, the shift to OTT will increase cost 20x for the
consumer. The younger audience that has moved to video/OTT platform can also be
tapped through ZEE’s revised digital content offerings.
14 December 2017
13

ZEE Entertainment
Exhibit 34: Consumption pattern on VoD platforms (Jan-17)
Platform
Hotstar TV
Voot TV
Amazon Video
Sony LIV
Netflix
OZEE TV
Active subscribers (m)
63.0
13.2
9.5
4.6
4.2
2.4
Minutes spent on platform (m)
11300
2800
NA
423
495
679
Source: FICCI-KPMG 2017, MOSL
Margin impact?
Compared to 500 hours of weekly content, the share of digital original content
would be significantly lower. So, the impact of digital content investment on
profitability will not be significant. Further, as majority of the front-ended cost of
digital launch with a large content portfolio should plateau out in the current fiscal.
This should lead to margin expansion beyond FY18.
14 December 2017
14

ZEE Entertainment
New verticals to keep investment high, add steam to
growth opportunity
ZEE is likely to continue investing for the next 18-24 months in two key areas: (a)
building a strong movie/music library, and (b) movie production.
It could deploy ~INR7b, of which ~INR3.5b could be towards movie/music library,
INR1.5b towards movies production, and INR2b towards maintenance capex and
building a new studio. Given its healthy cash generation capability, the investment is
unlikely to severely impact FCF. We estimate FCF of INR6b in FY18 and INR8b in FY19,
followed by INR13b in FY20.
These investments would help ZEE to (a) create strong offerings in Hindi/regional
movies, which remain a big pull in the Indian market, (b) tap the digital monetization
potential, and (c) add new growth verticals like music and movie production (apart
from events). ZEE targets new verticals (like movie production among others) to turn
sizeable in the next 2-3 years.
Movie library driven inventory to improve viewership; latent ad potential
Large part of the increase in inventory in the last 1-2 years is due to the acquisition
of movie rights (part of which is towards advances for future rights). Zee is investing
in both Hindi and regional movies, which form the core of TV viewing in India. The
share of movie viewership in the overall TV ad market has been increasing,
highlighting the importance of movies. The management has indicated that the
steady increase in movie-linked inventory should continue in FY18/FY19, but should
taper off beyond FY19.
Chasing new growth avenues
Music:
The music industry has grown at a paltry 6% in the last five years (CY11-16).
However, it is likely to grow at 16% over the next five years (CY16-21) on the back of
digital streaming, which contributes 70% of revenues for music labels. Improving
internet infrastructure and increasing prominence of music apps like Gaana and
Saavn are boosting digital consumption. Regional music is also gaining prominence.
ZEE has aggressively ramped up its music library, acquiring 50% of the music rights
released in the last three years across Hindi, Punjabi, Telugi, Gujarati Kannada and
Bengali. Its recent acquisition of 9XM at INR1.6b – (~26% revenue market share of
music ad market) with presence in four languages – Hindi, English, Marathi and
Punjabi should provide a funnel for growth and further strengthen its position.
14 December 2017
15

ZEE Entertainment
Exhibit 36: Zee Music acquired ~50% of music rights
released in last three years (%)
22
25
6.3
8.9
Zee Music
T-series
50.6
34.2
Sony Music
Others
Exhibit 35: Size of Indian music industry (INR b)
9
11
10
10
11
12
14
16
19
Source: FICCI-KPMG 2017, MOSL
Source: MOSL, Company
Movie production:
The movie industry is expected to grow at a CAGR of ~8% over
CY16-21 to reach INR207b. Movie production is becoming more attractive, given (a)
the shift in the movie exhibition space towards the organized segment, (b) wider
scale of releases with digital delivery, and (c) increased revenue contribution from
digital rights. ZEE intends to follow a low-risk approach: it would prefer script-driven
movies, restrict talent risk by building in profit-sharing arrangements, and widen its
investments across languages. Its presence across verticals like TV/digital platform
further improves monetization opportunity. It targets to limit investment to INR1.5b
working capital with 10-12 movies, which should not impact FCF significantly. Its
early success is evident in recent releases like Rustom (Hindi) and Sairat (Marathi)
crossing INR1b gross box office collection. ZEE has an aggressive amortization policy
– it amortizes 97.5% in the first six months to ensure a lean balance sheet.
Exhibit 37: India ranks first in number of movies released
(CY16)…
1,902
Exhibit 38: …but box office collections still a fraction of
those in developed markets (USD b)
11.4
944
6.6
736
610
338
2.0
1.9
1.5
India
China
US
Japan
S. Korea
US/Canada
China
Japan
India
S. Korea
Source: MOSL , Company
Source: MOSL , Company
14 December 2017
16

ZEE Entertainment
Exhibit 39: Regional movies gaining traction in INR142b
Indian movie industry (%)
51
138 142
155 166
178
Exhibit 40: Indian movies revenue to grow at a CAGR of 8%
over CY16-21 (INR b)
192
207
20
10
4
3
2
2
8
93
112
125 126
Source: MOSL, Company
Source: FICCI-KPMG 2017, MOSL
Events:
With a size of ~INR60b for the ticketing industry, the market is growing for
live concerts. However, the business remains tricky, given high opex, wafer-thin
margins and high gestation period (to create a marquee property). The management
has highlighted that its investment in the business would not be sizeable.
Exhibit 41: Indian organized events industry (INR b)
100.0
66.1
28
32.4
37
42.5
49.4
56.3
Source: EY release, MOSL
14 December 2017
17

ZEE Entertainment
Steady rise in revenue and margins
In 1HFY18, overall EBITDA margin expanded 240bp to 31.2%; however, ex-sports
EBITDA margin declined ~140bp to 31.2%. We believe this is because of (a) impact of
GST, (b) rebranding of Zee TV, and (c) higher investment on original content.
The management has guided EBITDA margin of over 30%. We expect 180bp expansion
in FY19 to 33% and 80bp expansion in FY20 to 33.8%, as (a) recovery in ad market to
drive operating leverage, (b) management has guided that &TV should turn profitable
from 4QFY18, (c) heavy investments in Zee TV rebranding would be behind, and (d)
significantly improved ratings of Zee TV should drive pricing.
Exhibit 42: EBITDA margin to expand
Revenue (INR b)
EBITDA margin (%)
29.9
31.9
33.0
33.8
24.3
25.8
27.2
25.7
26.0
30.4
FY12
37.0
FY13
44.2
FY14
48.8
FY15
58.1
FY16
64.3
FY17
64.6
FY18E
74.7
FY19E
85.7
FY20E
Source: MOSL, Company
&TV could provide healthy margin lever
The management had earlier guided breakeven in 3-5 years.
&TV
is in its third year
of launch and the management recently indicated that it is on track to break even,
with high original content of 26 hours per week. At 6% viewership share, it might be
close to breaking even; however, we would watch for whether and how fast
&TV’s
viewership share improves to 10%, which would significantly improve market share.
The management has indicated that the original programming would remain
unchanged in 3QFY18 – it would decide on future original programming based on
3QFY18 performance.
Content cost to be contained
ZEE plans to increase the original programming hours for its flagship channel,
Zee TV
from the current 27.5 hours per week to 30 hours in 3QFY18 and to 32 hours in
4QFY18. Additionally, the management also plans to increase regional original
content, particularly Tamil, from 60 hours to 75 hours by FY18. However, this could
have limited bearing on margins. ZEE has delivered on healthy ratings across its
flagship channel as well as regional channels, which should more than compensate
for the content cost increase. Secondly, with overall 500 hours of weekly content, a
10-hour increase may not have a big impact.
14 December 2017
18

ZEE Entertainment
Exhibit 43: Programming cost to decline
Programming and Satellite & Transmission Charges (INR b)
47.1
47.0
46.8
43.8
44.7
43.2
as a % of total revenue
38.3
37.7
37.4
14.3
FY12
17.4
FY13
20.7
FY14
21.4
FY15
26.0
FY16
27.8
FY17
24.7
FY18E
28.2
FY19E
32.0
FY20E
Source: MOSL, Company
We expect 10% CAGR in overall revenue over FY17-20. Ex-Sports, ad revenue should
grow at a CAGR of 15%, while subscription revenue should grow at a CAGR of 13%.
Healthy viewership share should attract steady ad revenue growth. Even if the TRAI
tariff order gets implemented, we believe it would not impact a large broadcaster
like ZEE in the long term, though there could be a knee-jerk impact in the quarter of
implementation, as content contracts with cable and DTH operators get revised. ZEE
has guided over 30% margin. Its ex-Sports margin has fallen 140bp to ~31.2% in
1HFY18; however, there are multiple margin levers to drive 390bp margin
improvement over FY17-20. We expect (a) higher growth, (b) completion of digital
launch and high promotion/marketing spends towards brand refreshment in FY18,
and (c) breakeven of
&TV
to drive overall EBITDA margin to 33.8% in FY20. Higher
margin and lower finance cost (led by preference share repayment in mid-FY19)
should provide impetus to adj. PAT (excluding exceptional items) to grow at 16%
CAGR over FY17-20.
Exhibit 44: Ad revenue to grow at 15% CAGR over FY17-20
Ad revenue (INR b)
26.5
24.0 21.2
11.8
-7.3
15.8
19.6
23.8
26.6
33.7
36.7
39.9
46.7
53.9
YoY growth (%)
9.2
17.2
15.4
32
24
16
8
0
17.5
Expect adj. PAT to grow at 16% CAGR over FY17-20
Exhibit 45: Subscription revenue to grow at 13% CAGR over
FY17-20
International (INR b)
Domestic (INR b)
Total subscription revenue growth (%, YoY)
22.6
11.0
-0.4
14.7
10.0
14.2
-9.4
14.0
8.5
Source: MOSL, Company
Source: MOSL, Company
Adj PAT (INR b)
YoY growth (%)
52.5
Exhibit 46: Adj. PAT to grow at 16% CAGR over FY17-20
22.2
4.2
23.9
9.6
-13.8
7.9
20.0
19.1
5.9
FY12
7.2
FY13
8.9
FY14
9.8
FY15
8.4
FY16
12.9
FY17
13.9
FY18E
16.6
FY19E
19.8
FY20E
Source: MOSL, Company
14 December 2017
19

ZEE Entertainment
Valuation and view
Maintain Buy with a revised target price of INR690
ZEE continues to lead the industry in advertising growth. Recent strong ratings in Hindi
GEC should further strengthen its presence in this core segment, driving market share
gains.
The stock has been languishing around INR550 for the last 12 months owing to weak
earnings on demonetization and GST impact. We expect healthy growth in 2HFY18,
driven by ad market recovery and ZEE’s strong viewership share.
The stock trading at 32.8x FY19E and 27.5x FY20E EPS, and at an EV of 21.3x FY19E and
17.7x FY20E EBITDA.
As high investment of ~INR7b in movie/music inventory and movie production tapers
by FY19, FCF generation should grow from INR6b/8b in FY18/19 to INR13b in FY20.
While RoCE is likely to dip from 21% in FY17 to 17% in FY18, on higher investments, it
should inch up to 18% in FY19 and 20% in FY20. RoIC of 27% in FY18 should also
improve to 31% by FY20
We raise our EPS estimates by 19% for FY18 and by 8% for FY19, factoring preference
share repayment in mid-FY19 and marginal opex reduction. Buy with a revised target
price of INR690 (35x December 2019E EPS).
ZEE remains the best play in the media industry, with ZEE high growth visibility driven
by continuous widening of target market (new channel/genre, verticals like Music).
Recovery in ad growth coupled with improving RoCE should support premium
valuation of 35x v/s 3-year average one-year forward P/E of 42.4x.
Exhibit 47: Summary of estimate change (INR b)
Total revenue
Old
New
Change (%)
EBITDA
Old
New
Change (%)
EBITDA margin (%)
Old
New
Change (bp)
PAT
Old
New
Change (%)
EPS (INR)
Old
New
Change (%)
FY18E
64.6
64.6
0
20.4
20.6
1.1
31.5
31.9
35
14.5
14.8
2.2
12.2
14.4
18.8
FY19E
74.7
74.7
0.1
24.3
24.7
1.4
32.6
33
41
16.5
16.6
1.1
FY20E
85.5
85.7
0.2
28.5
29
1.6
33.4
33.8
48
19.5
19.8
1.4
16
19.5
17.3
20.6
8.3
5.8
Source: Company, MOSL
14 December 2017
20

ZEE Entertainment
Exhibit 48: ZEE: PE band chart 1 year forward
P/E (x)
60.0
45.0
30.0
15.0
0.0
10.0
28.2
38.9
Avg (x)
Max (x)
Min (x)
51.1
Exhibit 49: Valuation based on DEC-19 EPS
Valuation
Dec-19 EPS
PE multiple (x)
Target Price (INR)
CMP (INR)
Upside (%)
INR
19.8
35
690
568
22%
Source: MOSL, Company
Source: Bloomberg, MOSL, Company
Exhibit 50: FCF to touch new high
FCF (INR b)
0.1
-0.3
-0.4
0.0
-0.1
-0.3
-0.3
-0.4
-0.4
13.3
Net Debt to Equity (x)
Exhibit 51: RoE and RoCE to reach 20% by FY20
ROE (%)
34
28
22
16
10
ROCE (%)
ROIC (%)
3.3
3.2
2.4
5.7
4.6
4.0
6.2
8.4
Source: MOSL, Company
Source: MOSL, Company
14 December 2017
21

ZEE Entertainment
Financials and Valuation
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Programming/Production expenses
Employees Cost
Other Expenses
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
Fair Value through P&L gain/(loss)
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Minority Interest/Associate
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY13
36,997
21.7
17,400
3,491
6,561
27,452
74.2
9,545
25.8
399
9,146
86
1,461
0
10,521
0
10,521
3,337
31.7
-14
7,198
7,198
22.2
19.5
FY14
44,217
19.5
20,689
3,905
7,581
32,175
72.8
12,042
27.2
501
11,541
158
1,807
0
13,191
0
13,191
4,291
32.5
-21
8,921
8,921
23.9
20.2
FY15
48,837
10.4
21,393
4,498
10,408
36,299
74.3
12,538
25.7
673
11,865
103
2,278
0
14,040
0
14,040
4,284
30.5
-20
9,776
9,776
9.6
20.0
FY16
58,125
19.0
25,984
4,986
12,019
42,989
74.0
15,136
26.0
777
14,359
1,598
1,951
-673
14,039
-331
13,708
5,491
40.1
-14
8,231
8,429
-13.8
14.5
FY17
64,342
10.7
27,825
6,043
11,205
45,073
70.1
19,269
29.9
1,152
18,117
1,372
2,240
-2,205
16,780
12,234
29,014
6,805
23.5
-8
22,217
12,852
52.5
20.0
FY18E
64,556
0.3
24,706
6,950
12,324
43,980
68.1
20,576
31.9
1,439
19,136
1,262
3,646
-680
20,840
1,346
22,186
7,432
33.5
-12
14,765
13,870
7.9
21.5
FY19E
74,736
15.8
28,200
7,905
13,955
50,061
67.0
24,675
33.0
1,562
23,113
506
2,602
0
25,209
0
25,209
8,571
34.0
0
16,638
16,638
20.0
22.3
(INR m)
FY20E
85,678
14.6
32,009
9,091
15,583
56,683
66.2
28,995
33.8
1,732
27,262
2
2,766
0
30,026
0
30,026
10,209
34.0
0
19,817
19,817
19.1
23.1
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Capital Employed
FY13
954
38,161
39,115
33
28
-288
38,888
5,179
2,400
2,779
7,127
69
8,435
32,045
8,745
9,890
5,316
8,094
11,567
5,172
3,608
2,787
20,478
38,888
FY14
960
26,247
27,207
61
20,199
-298
47,169
5,921
2,813
3,108
7,625
997
12,597
35,692
11,736
10,281
5,644
8,031
12,850
5,050
4,154
3,646
22,842
47,169
FY15
960
34,346
35,306
4
20,214
-531
54,993
6,415
2,925
3,490
7,886
878
14,579
42,694
11,878
10,692
7,365
12,759
14,534
4,204
5,258
5,072
28,160
54,993
FY16
960
47,079
48,039
22
17,159
-648
64,573
9,221
3,792
5,429
8,843
1,104
10,501
53,135
13,180
13,482
9,631
16,842
14,439
4,768
9,060
611
38,696
64,573
FY17
960
65,608
66,568
10
19,096
-903
84,772
11,181
4,542
6,639
2,676
1,558
13,433
75,160
16,844
13,059
26,133
19,124
14,694
4,891
8,947
856
60,467
84,772
FY18E
960
77,492
78,452
5
15,281
-903
92,835
12,808
5,903
6,904
2,676
1,558
13,431
83,299
20,441
14,503
28,016
20,339
15,033
5,073
9,131
830
68,266
92,835
FY19E
960
90,673
91,633
5
19
-903
90,754
14,358
7,465
6,893
2,676
1,558
13,431
82,066
23,951
15,971
19,826
22,318
15,869
5,197
9,817
855
66,197
90,754
FY20E
960
1,07,033
1,07,993
5
19
-903
1,07,114
15,768
9,198
6,571
2,676
1,558
13,431
99,896
25,431
17,605
32,448
24,412
17,017
5,737
10,431
849
82,879
1,07,114
(INR m)
Gross Block
Less: Accum. Depre.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans & Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
14 December 2017
22

ZEE Entertainment
Financials and Valuation
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Net Debt/Equity
FY13
7.5
7.9
40.7
2.0
31.0
FY14
9.2
9.7
28.3
2.0
25.2
FY15
8.9
9.6
36.8
2.3
26.6
63.7
59.0
15.4
11.4
44.5
0.4
31.3
19.1
27.4
0.9
89
80
31
0.0
FY16
8.8
8.1
50.0
2.3
31.7
64.7
70.4
11.3
9.5
36.5
0.4
20.2
16.2
22.8
0.9
83
85
30
-0.1
FY17
13.4
13.3
69.3
2.5
13.0
42.4
42.6
8.2
8.4
27.9
0.4
22.4
20.7
31.9
0.8
96
74
28
-0.3
FY18E
14.4
14.6
81.7
2.5
19.5
39.3
38.8
6.9
8.2
25.9
0.4
19.1
16.9
27.2
0.7
116
82
29
-0.3
FY19E
17.3
18.4
95.4
3.0
20.8
32.8
30.8
6.0
7.0
21.3
0.5
19.6
18.3
28.8
0.8
117
78
25
-0.4
FY20E
20.6
22.4
112.4
3.0
17.4
27.5
25.3
5.0
6.0
17.7
0.5
19.9
19.9
31.1
0.8
108
75
24
-0.4
0.3
19.6
19.7
26.5
1.0
86
98
51
-0.4
0.4
26.9
20.8
29.4
0.9
97
85
42
0.1
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Equity shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY13
10,519
399
30
-3,669
-2,348
4,931
-1,068
3,863
-709
3,154
328
847
466
-601
7
-30
-1,663
0
-2,287
2,042
3,274
5,316
FY14
13,191
501
76
-4,242
-4,904
4,622
-793
3,829
-1,465
2,364
-19
-563
-2,047
778
1
-26
-2,244
47
-1,444
338
5,306
5,644
FY15
14,040
673
22
-4,164
-2,236
8,335
-1,526
6,809
-1,091
5,718
-954
396
-1,649
0
-1,008
-71
-2,348
0
-3,427
1,733
5,632
7,365
FY16
14,040
777
28
-5,827
-2,497
6,521
788
7,309
-2,716
4,593
-611
4,524
1,197
59
-4
-28
-4,051
-22
-4,046
4,460
5,171
9,631
FY17
16,780
1,152
73
-6,810
-5,670
5,525
1,165
6,690
-2,704
3,986
-2,975
20,664
14,985
0
0
-73
-4,065
0
-4,138
17,537
8,596
26,133
FY18E
22,186
1,439
1,262
-7,432
-5,917
11,538
-3,634
7,904
-1,705
6,199
2
4,663
2,959
0
-3,815
-1,262
-2,881
-5
-7,964
2,900
25,116
28,016
FY19E
25,209
1,562
506
-8,571
-6,121
12,586
-2,602
9,984
-1,551
8,433
0
3,619
2,068
0
-15,262
-506
-3,457
0
-19,225
-7,173
26,999
19,826
(INR m)
FY20E
30,026
1,732
2
-10,209
-4,060
17,492
-2,766
14,726
-1,410
13,315
0
3,783
2,373
0
0
-2
-3,457
0
-3,459
13,639
18,809
32,448
14 December 2017
23

Disclosures:
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ZEE Entertainment
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Analyst ownership of the stock
ZEE Entertainment
No
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14 December 2017
24