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Zee Entertainment In Focus, here’s why


Zee Entertainment jumped after chief executive and CEO Punit Goenka said the Sony merger was in its final stages of implementation.

He went on to say that the merged entity would form the largest multimedia entertainment player in the country.

He added that Sony’s capital injection into the merged entity will make it possible to invest in premium content, especially sports.

In accordance with the binding agreement, Zee will own 47% and Sony India 53% in the merged entity.

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Globally, mergers have seen revenue synergies of approximately 6-7% and management expects similar synergies for the merged entity.

Additionally, Zee will focus on maintaining ROCE at current levels.

Additionally, going forward, Zee is expected to benefit strongly from the resumption of ad spend and management after their earnings from T2FY22 made it clear that ad revenue would return to pre-COVID levels not only for Zee but at the level of industry.

Zee also managed to gain market share of 70 basis points (bps) in the last quarter on new launches and expects additional market share in the coming quarters.

The stock is up 12% so far this month, up 50% so far this year, and is trading 16 times a year from 9-10 times after the announcement of the OK.

Watch CNBC-TV18’s Nupur Jainkunia companion video for more details.

First publication: STI


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