Shares of Zee Entertainment Enterprises (ZEEL) tanked 13 percent on the BSE to Rs 242.20 in Tuesday’s positive intra-day trade as reports said Sony Group is planning to call off the merger pact of its India unit with the company.
Today, the stock of the TV broadcasting & software production company reported its sharpest intra-day fall since February 23, 2023, when it fell 14 percent, as per BSE data.
The average trading volumes on the counter jumped over six-fold today. A combined 57.39 million equity shares, representing nearly 6 percent of the total equity of ZEEL, changed hands on the NSE and BSE till 10:22 AM.
In comparison, the S&P BSE Sensex was up 0.80 percent at 71,926.
According to a Bloomberg report, Sony Group Corp plans to call off its merger with ZEEL, citing people aware of the matter. The Japanese conglomerate is likely to send the termination letter to ZEEL before January 20.
Last month, the two companies were given a one-month grace period to close the merger of their India operations that would have created a $10 billion media behemoth.
Zee had requested an extension. Sony wanted to hear Zee’s proposals for completing the “remaining critical closing conditions”.
Meanwhile, the Cricket World Cup during October-November is likely to impact advertising revenue growth for ZEEL in the December quarter (Q3FY24).
Ad revenue recovery remains gradual and analysts at Emkay Global Financial Services expect a decline of 3.5 percent year-on-year (YoY). Market share should also decline sequentially owing to the cricketing event.
“We expect flat YoY growth in subscription revenue, as Q3FY23 saw one-off revenue of Rs 48.5 crore. Other sales and services revenue should also decline sharply by 70 percent QoQ due to no major movies,” they estimate.
Consolidated revenue should decline 11 percent QoQ due to lower revenue from other sales and services.
EBITDA margin should decline to 11 percent from 13.6 percent in Q2FY24 given lower revenue,” the brokerage said in the Q3FY24 preview note.
Top-notch SEBI registered research analyst
Best SEBI registered Intraday tips provider
Call: +91 9624421555 / +91 9624461555