OTT concerns to remain an overhang for Zee Entertainment; stock falls

Firm, however, has reiterated margins will remain steady near the 30%-mark despite OTT investments

The Zee Entertainment stock fell nearly 10 per cent intra-day on worries that its over-the-top (OTT) application Zee5 will weigh on margins. 

Analysts at Morgan Stanley, in a report, indicated that intense competition in the OTT space — especially from deep pocketed international players Amazon and Netflix, as well as domestic players such as Reliance Jio — would require Zee to spend on high quality content, thus impacting margins. 

They expect margins of the company to fall by 3-5 percentage points and expect the company (Zee5) to break even by 2023, at the earliest. 

The stock, however, recovered and closed