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Zee Entertainment Enterprises – Spectacular Results

July 25, 2008

Zee Entertainment Enterprises had an excellent 1QFY09 with 33%YoY growth Rec. PAT (19% ahead of MLe) led by 37%YoY growth in ad revenues & robust international / DTH pay-tv revenues. Robust Ad growth despite IPL Cricket and competition (NDTV, 9X) was commendable. Despite the provision of Rs290mn of one-time bonuses and Rs398mn loss on Zee Next, rec. PAT grew 33%YoY.

Z TV sustained its relative shares in 1Q09 with ~21% channel share amongst GECs despite competition (9X & NDTV). This led ad revs at 37%YoY. INR depreciation helped global pay revs grow +18%YoY and doubling of DTH revs led India pay revs.

Catalysts are, full impact of 15-20% ad rate hike in 1QFY09 on Zee TV to monetize ratings and lack of clear #3 channel in GEC market and uptick in pay-tv revs from DTH & International markets.

The company is expected to report a full year EPS of Rs 11.56 on an income of Rs 501.3 crore.

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