Zee Entertainment is proving to be a super hit today after news came in that Punit Goenka resigned as MD of the company but will continue as CE), “to focus on operational responsibilities.” Mukund Galgali has been elevated to the role of Deputy Chief Executive Officer and he will assume this role in addition to CFO, and will continue to report to Goenka.

The Board has bought in a 4 quarter performance parameter to evaluate Goenka wherein the existing full time employment stays but the variable portion of his salary (40%) will be paid to him only on achievement of certain milestones, subject to a maximum cap as defined by the Board.

This is the first step in more good news coming from the company. In fact more than 10 days ago, Mr.SP Tulsian had mentioned that at the AGM, due to be held on 28th Nov, re-appointment of Punit Goenka as MD & CEO is unlikely to go through, as 49% of votes pooled should reject this move. Since 96% stake is held by the non promoter, (about 19% is held by MF, DIIs and insurance companies, while 19% is held by FIIs., with 34% is held by the retail investors, with remaining 24% by HNIs & Body corporates. MF, FIIs and HNIs knows the destruction in valuation being done by the promoters, now holding 4% stake, but seen buying in Benami names to shore up their stake.

Mr SP Tulsian has said that it is reliably learnt that even Govt wishes to bring new promoters, which may see LIC & Other state run insurance companies, with FIIs seen voting against the resolution. It is also expected that share may move to Rs.150 in the next 3 weeks, as buying will be seen by the promoter and anti-promoter group. It is likely that by 28-11-24, either way things will be seen unfolding, eventually seen giving an extremely bullish view on the stock.

The company is doing better on the earnings front. Q2 FY25 EBITDA of Rs 321 cr was up by 16%, with EBITDA Margin up by 240 bps YoY, with growth in Q2 FY25 PAT, seen up by 61% from continuing operation of Rs 210 cr. Domestic advertising revenue for the quarter declined by 9% YoY, impacted by muted Ad spending environment in Q2, but Ad Spending is picking up now, with onset of festive season. Subscription revenue showed continued healthy growth driven by both Linear subscription revenue, post NTO 3.0 & ZEE5. Other sales and services declined YoY, as Q2 FY24 had higher theatrical revenue from Gadar 2. Cash & treasury investments of the company as of Sept’24, stood at Rs 1,782 cr, being Rs. 18 per share. Q2 FY25 EPS is at Rs. 2.18 and Rs. 3.49 in H1FY25, with FY24 EPS at Rs.2.07.

The stock, which had closed yesterday at Rs.115.50, opened today at Rs.118.05 and rose 8% to an intraday high at Rs.124.50. Its 52-week high stands at Rs.299.50.