scorecardresearch
This stock rose 40% in one week, here's what brokerages say

This stock rose 40% in one week, here's what brokerages say

It ended 3.34 per cent higher at Rs 255.30 against the previous close of Rs 247.05 on BSE. Market cap of the firm rose to Rs 24,521.97 crore.

This stock rose 40% in one week, here's what brokerages say This stock rose 40% in one week, here's what brokerages say

Shares of Zee Entertainment Enterprises have clocked strong gains during the last few trading sessions after the company disclosed that two institutional investors -- Invesco Developing Markets Fund and OFI Global China Fund IIC -- that collectively hold around 17.88 per cent stake in Zee Entertainment have sought the removal of Managing Director Punit Goenka and two others as the directors of the company.

The stock rose 6 per cent to hit an intraday high of Rs 262 in intra-day trade today. It ended 3.34 per cent higher at Rs 255.30 against the previous close of Rs 247.05 on BSE. Market cap of the firm rose to Rs 24,521.97 crore.

As per the share price history, shares of Zee Entertainment Enterprises closed at Rs 186.8 on September 13, 2021. It hit an intraday high of Rs 262 today. In a week, the stock has delivered 40 per cent returns.

The share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200 day moving averages. It has gained 17 per cent in the last 12 months and risen 16 per cent since the beginning of this year.

The two investors, via the September-12 letter, had called for an extraordinary general meeting (EGM) of the company shareholders to pass the three ordinary resolutions. They also sought the removal of Manish Chokhani and Ashok Kurien as the directors of the company.

Meanwhile, ZEE Entertainment Enterprises Ltd's board of directors has strongly condemned the allegations levelled by "certain proxy advisory firms" against its former non-executive directors, Ashok Kurien and Manish Chokhani.

In a statement to the stock exchanges, Zee Entertainment said these two directors decided to step down from the board due to "personal reasons" and to pursue their interests beyond the "confines of a boardroom".

These two had stepped down on September 13, a day after two institutional investors holding around 17.88 per cent stake in the company sought their removal.

Big bull Rakesh Jhunjhunwala on Tuesday bought 50 lakh shares of the company in a bulk deal worth Rs 110.22 crore.  Apart from Jhunjhunwala, Bank of America Securities Europe SA also bought 48.7 lakh shares at Rs 236.2 apiece in a bulk deal worth nearly Rs 115 crore.

"Though the core broadcasting business is still not out of the woods (network share was down 190bps QoQ to 17% in 1QFY22), board reconstitution and improvement in user engagement metrics of ZEE5 are likely to drive re-rating from here on. Consequently, we increase our target P/E multiple to 18x (earlier 15x) and arrive at a target price of Rs 303 (earlier Rs 253)," said Prabhudas Lilladher.

"We have persistently highlighted in our notes of potential change in management, improvement in cash flows and traction in digital business as key re-rating triggers. At CMP, Zee trades at attractive 15/13x FY23/24E EPS. With one of the key triggers getting activated we upgrade our target multiple from 13x to 20x Sep-23E EPS with the target price of Rs 328 (vs. Rs 204) and rating to BUY (from Reduce)," said Dolat Capital.