Looking for fundamental growth story? Pay attention to Zee Entertainment Enterprises
28-05-2014 • About Zee Entertainment Enterprises (
$ZEEL) • By InTwits
Zee Entertainment Enterprises is a growth stock in Broadcasting & Cable TV industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Zee Entertainment Enterprises showed fast growth in the last financial year. Zee Entertainment Enterprises's revenue surged on 18.6% in FY2014. In addition to revenue Zee Entertainment Enterprises also keeps delivering EBITDA growth. It was 26.2% in FY2014
In the longer period Zee Entertainment Enterprises showed fast revenue growth of 13.2% from FY2011 to FY2014 annually. EBITDA surged on 13.6% from FY2011 to FY2014 annually.
Zee Entertainment Enterprises ($ZEEL) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 58,333 | 30,088 | 30,263 | 36,833 | 43,699 |
|---|
| Revenue growth, % | | -48.4% | 0.6% | 21.7% | 18.6% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 6,135 | 8,220 | 7,395 | 9,543 | 12,043 |
|---|
| EBITDA growth, % | | 34.0% | -10.0% | 29.0% | 26.2% |
|---|
| EBITDA margin, % | 10.5% | 27.3% | 24.4% | 25.9% | 27.6% |
|---|
| Net Income | 6,344 | 6,369 | 5,891 | 7,196 | 8,921 |
|---|
| Net Income margin, % | 10.9% | 21.2% | 19.5% | 19.5% | 20.4% |
|---|
| |
| CAPEX | 629 | 389 | 816 | 751 | 1,482 |
|---|
| CAPEX/Revenue, % | 1.08% | 1.29% | 2.70% | 2.04% | 3.39% |
|---|
| Debt | 1,195 | 17 | 118 | 171 | 92 |
|---|
| Cash | 5,864 | 3,856 | 3,283 | 5,316 | 5,644 |
|---|
| Net Debt/EBITDA | -0.8x | -0.5x | -0.4x | -0.5x | -0.5x |
|---|
| |
| ROIC, % | 13.7% | 21.6% | 21.1% | 24.2% | 25.5% |
|---|
| ROE, % | 17.6% | 18.4% | 18.0% | 19.6% | 26.6% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. The company showed EBITDA margin growth of 1.70 pp from 25.9% to 27.6% in FY2014. If we look for the longer period the company showed small growth in EBITDA margin of 0.300 pp from 27.3% in FY2011 to 27.6% in FY2014.
We call Zee Entertainment Enterprises an attractive growth stock as together with the growth it delivers high ROIC at 25.5%. Three years ago it was a bit lower at 21.6%. It's average level of ROIC for the last three years was 23.6%.
Zee Entertainment Enterprises's Net Income margin increased slightly on 0.900 pp from 19.5% to 20.4% in FY2014. In the longer period the company's Net Income margin decreased slightly on 0.800 pp from 21.2% in FY2011 to 20.4% in FY2014.
Zee Entertainment Enterprises operates at ROE of 26.6%. It's average ROE for the last three years was 21.4%.
Capital expenditures (CAPEX)
Zee Entertainment Enterprises's CAPEX/Revenue was 3.39% in FY2014. The company showed fast CAPEX/Revenue growth of 2.10 pp from 1.29% in FY2011 to 3.39% in FY2014. It's average level of CAPEX/Revenue for the last three years was 2.71%.
Leverage (Debt)
Zee Entertainment Enterprises has negative net debt at -0.5x Net Debt/EBITDA - at the same time with high growth. In the last 3 years Zee Entertainment Enterprises showed fast leverage growth of 0.01x from -0.47x in FY2011 to -0.46x in FY2014.
Management team
Zee Entertainment Enterprises is headed by Punit Goenka as a CEO and by Mihir Modi as a CFO.
Peers in Broadcasting & Cable TV
Below we provide Zee Entertainment Enterprises benchmarking against other companies in Broadcasting & Cable TV industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Balaji Telefilms ($BALAJITELE) | | -53.5% | -2.3% | -1.0% | 119.1% |
| Zee Media Corporation ($ZEEMEDIA) | | -57.5% | 10.6% | -1.7% | 11.3% |
| |
|---|
| Median (2 companies) | | -55.5% | 4.1% | -1.3% | 65.2% |
|---|
| Zee Entertainment Enterprises ($ZEEL) | | -48.4% | 0.6% | 21.7% | 18.6% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Zee Media Corporation ($ZEEMEDIA) | 14.7% | 16.6% | 18.6% | 13.6% | 9.5% |
| Balaji Telefilms ($BALAJITELE) | 0.7% | 0.6% | 1.3% | 4.4% | -5.1% |
| |
|---|
| Median (2 companies) | 0.7% | 8.6% | 10.0% | 9.0% | 2.2% |
|---|
| Zee Entertainment Enterprises ($ZEEL) | 10.5% | 27.3% | 24.4% | 25.9% | 27.6% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Zee Media Corporation ($ZEEMEDIA) | 1.7% | 3.8% | 3.4% | 5.9% | 31.6% |
| Balaji Telefilms ($BALAJITELE) | 1.0% | 6.7% | 2.4% | 1.3% | 0.6% |
| |
|---|
| Median (2 companies) | 1.7% | 5.2% | 2.9% | 3.6% | 16.1% |
|---|
| Zee Entertainment Enterprises ($ZEEL) | 1.1% | 1.3% | 2.7% | 2.0% | 3.4% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Raj Television Network ($RAJTV) | -13.7% | -9.1% | 10.1% | 10.3% | 11.5% |
| Zee Media Corporation ($ZEEMEDIA) | 20.8% | 11.9% | 18.8% | 11.9% | 5.2% |
| Balaji Telefilms ($BALAJITELE) | -2.0% | -2.7% | -1.4% | 0.1% | -6.8% |
| |
|---|
| Median (3 companies) | -2.0% | -2.7% | 10.1% | 10.3% | 5.2% |
|---|
| Zee Entertainment Enterprises ($ZEEL) | 13.7% | 21.6% | 21.1% | 24.2% | 25.5% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Raj Television Network ($RAJTV) | | | 0.6x | 0.7x | 1.6x |
| Zee Media Corporation ($ZEEMEDIA) | 1.7x | -0.6x | 0.2x | 0.3x | 3.0x |
| Balaji Telefilms ($BALAJITELE) | -0.6x | -4.4x | -2.4x | -1.3x | |
| |
|---|
| Median (3 companies) | 0.5x | -2.5x | 0.2x | 0.3x | 2.3x |
|---|
| Zee Entertainment Enterprises ($ZEEL) | -0.8x | -0.5x | -0.4x | -0.5x | -0.5x |
