Analysts' corner

Zee Entertainment Enterprises & Reliance Communications

ZEE ENTERTAINMENT ENTERPRISES
Reco price/date: Rs 185/September 21
Current/target price: Rs 178/Rs 244
Zee Entertainment Enterprises (ZEE) has announced the launch of India’s first 24-hour Bengali movie channel, Zee Bangla Cinema. This will further exemplify ZEE’s increasing focus on key regional markets (it has increased investments in Tamil Nadu, which is the largest regional market). This will fortify its presence in Bengal after its strong resurgence in the local GEC market. Though this launch might lead to compression in near-term margins, analysts believe the positive impact of digitisation on subscription revenue and long-term value created by new channels will help reap returns. Maintain buy

Edelweiss Securities

RELIANCE COMMUNICATIONS
Reco price/date: Rs 62/September 24
Current/target price: Rs 64.2/NA
RCom has raised call rates by 25 per cent in four circles (MP, Himachal Pradesh, Bihar and Gujarat) for post-paid and pre-paid customers. The company said it has revised its base price from 1.2 paise per second to 1.5 paise and they would be rolled out across the county within a month. The company has lost 20 million subscribers in July and was staring at flat growth from new and active subscribers. RCom has actually implemented this rate rise in their GSM band, which has much fewer subscribers, as compared to those on the CDMA band. It needed to take this step to improve its margins urgently. Maintain neutral

Angel Broking