ZEE drops after announcing Q1 results

Zee Entertainment Enterprises dropped 1.54% to Rs 541.85 at 10:25 IST on BSE after the company announced Q1 results after market hours yesterday, 24 July 2017.

Meanwhile, the S&P BSE Sensex was up 30.76 points, or 0.09% to 32,275.37.

On the BSE, 68,144 shares were traded in the counter so far, compared with average daily volumes of 1.29 lakh shares in the past one quarter. The stock had hit a high of Rs 558.90 and a low of Rs 537.30 so far during the day. The stock had hit a 52-week high of Rs 588.80 on 3 October 2016. The stock had hit a 52-week low of Rs 428.50 on 23 December 2016.

The stock had outperformed the market over the past one month till 24 July 2017, rising 8.12% compared with 3.56% rise in the Sensex. The scrip had, however, underperformed the market in past one quarter, rising 4.95% as against Sensex's 8.73% rise. The scrip had, however, outperformed the market in past one year, rising 18.08% as against Sensex's 15.98% rise.

The large-cap company has equity capital of Rs 96.04 crore. Face value per share is Re 1.

Zee Entertainment Enterprises' (ZEE) consolidated net profit rose 16% to Rs 251.6 crore on 2% decline in operating revenue to Rs 1540.3 crore in Q1 June 2017 over Q1 June 2016.

Punit Goenka, Managing Director & Chief Executive Officer, ZEEL, commented, that it was yet another satisfying quarter with a strong financial and operating performance. During the quarter, the company recovered from the impact of demonetization and the growth in the first two months was strong. However, the momentum was disrupted in June in the run-up to GST implementation.

The advertisers reduced ad spends on existing brands and launched fewer products as distribution chain was not fully prepared for seamless transition to the new regime. Despite the challenge, domestic ad revenue grew by 7%. Notwithstanding the short-term impact, the company believes that GST will aid the advertising spends in the long-run.

The domestic subscription revenue, adjusted for the sale of sports business, grew by 14.5%. While there is still uncertainty regarding the implementation of the new tariff regulation due to pending litigations, the company is confident of driving the subscription business on the back of the strong competitive positions of channels in the key genres, he added.

Meanwhile, the company's board approved a composite scheme of arrangement and amalgamation between the company and certain domestic wholly-owned subsidiaries which includes demerger of Digital Media and Entertainment Business undertaking from Zee Digital Convergence, vesting with the company. Demerger of Advertisement Sales Media Business undertaking from Zee Unimedia, vesting with the company.

Demerger of Online Media Business undertaking from India Webportal Private, vesting with the company and amalgamation of Sarthak Entertainment with the company, with effect from appointed date of 1 April 2017. Since the corporate restructuring involves the company and its wholly owned subsidiaries, the scheme does not provide for any consideration for the demerger/merger proposed in the scheme.

The audit committee of the board of directors of the company approved appointment of Bharat Kedia as Chief Financial Officer of the company with effect from 1 August 2017, in place of Mihir Modi, who will be moving to a new role in the company.

Zee Entertainment Enterprises is one of India's leading television media and entertainment companies. The company and its affiliate companies have leading presence across the media value chain including television broadcasting, cable distribution, direct-to-home satellite services, digital media and print media amongst others.

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