Shares of Zee Entertainment jumped nearly 10 per cent in trade on Thursday, wiping off the yesterday's fall of 4 per cent after the company detailed its September quarter numbers for the fiscal year 2015-16 on Wednesday.
The 35 per cent spurt in ad revenue growth year-on-year versus estimates of 25 per cent triggered bullish calls on the scrip. The scrip closed at Rs 418.50, up 8.53 per cent on Bombay Stock Exchange (BSE).
The stock surged as much as 9.56 per cent during the day.
"We remain positive on the company's long-term outlook on the back of the improving macro environment and network market share gain. We expect advertising growth momentum to continue on the back of festival season and improvement in the macro environment. However, rich valuations have restricted us from taking a constructive view on the stock," said brokerage SBICAP Securities.
The brokerage maintains HOLD on the stock with a revised target price of Rs 415 at 30x Sept'17e earnings.
"Strong ad growth is expected to continue led by viewership share gains for existing channels and impact of TV," said broking firm Motilal Oswal.
"ZEE has seen an impressive performance during the second quarter. The improvement in advertisement industry and improved performance of our network has helped us grow ahead of the market," its Chairman Subhash Chandra said.
The media firm reported 8.72 per cent increase in consolidated net profit at Rs 247.40 crore in Q2 FY16. It had posted a net profit of Rs 227.55 crore for the same period last fiscal.
Total income of the company stood at Rs 1,384.90 crore during the quarter as against Rs 1,117.82 crore last year, ZEE said in a regulatory filing.
In a separate filing the company said its board has approved the resignation of Subodh Kumar Executive Vice Chairman from his executive position, with immediate effect.
Kumar will, however, continue as a non-executive director on the company's board.