Hold ZEE Entertainment Enterprises with a target at Rs 440: JM Financial Research

JM Financial Research maintains hold rating on ZEE Entertainment post March quarter results with a 12-month target price of Rs 440. Zee's March quarter EBITDA came in 13 per cent ahead of consensus-average.

On a full year basis, FY16 EBITDA growth was 20 per cent YoY, same as revenue growth; margin was flat despite higher &TV losses. "We have raised EBITDA forecasts by 4-6%, and now project 24 per cent CAGR over FY16-19E versus 23 per cent previously," said the report.

"Despite likely strong EPS growth, we expect FCFE yield to remain muted at less than 2 per cent over the next couple of years, reflecting investments in content and working capital, as well as dividends on and redemption of bonus preference shares," said the brokerage note.