Zee Entertainment Enterprises (Z)
Media
FY2012 annual report analysis: FCF impacted by large jump in film investments.
Zee reported weak FCF/PAT despite robust operating cash flows due to (1) large jump in
film/movie rights inventory and (2) increased capex led by launch of 4 HD channels.
The content investments are needed to stem loss in network market share and likely to
continue; however, the large working capital/cash flow impact is unlikely going ahead
given stability in film investments (Rs3.3 bn in FY2012 and Rs2.5-3.5 bn in the future).
ADD (unchanged) with 12-month forward FV of Rs160 (unchanged).
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link: http://www.kotaksecurities.com/pdf/indiadaily/indiadaily18072012zl.pdf
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