Wednesday, December 28, 2011

Analysts' corner

ZEE ENTERTAINMENT
Reco price: Rs 117 ;
Target price: Rs 110
Zee Entertainment (ZEE) has been losing viewership share among Hindi and Marathi general entertainment channels (GECs) and Hindi movies. However, it has seen its market share increase in the Bengali and Kannada GEC markets. After declining five per cent in FY12, analysts expect ad revenue (including sports) to grow 10 per cent in the coming financial year.They also model acceleration in domestic subscription growth at 18 per cent in FY13, from 12 per cent in FY12. Ebitda loss in the sports business is likely to be below Rs 100 crore in FY12 and decline further in FY13. Analysts expect an earnings per share (EPS) growth of four per cent in FY12 and 10 per cent in FY13. The stock trades at 19 times FY12 estimated EPS and 17 times FY13 estimated EPS. Maintain buy.
MOSL Research
INFO EDGE
Reco price: Rs 580;
Target price: Rs 508
Centrum has downgraded Info Edge to ‘sell’, as it believes with GDP growth pegged at 6.9 per cent, recruitment business would face significant challenges in growing at over 10 per cent in the coming financial year. Coupled with losses from non-recruitment verticals and increasing investment in new companies, analysts believe the valuations are stretched. Info Edge has fallen only 10 per cent against the Nifty’s 25 per cent fall and CNX Midcap index’s 32 per cent decline in 2011. The stock continues to trade at 31 times and 27.6 times the FY12 and FY13 estimated standalone earnings per share (EPS). Analysts believe valuations are expensive compared to its international peers and the markets are not factoring in the slowdown in earnings. Sell.

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