Porinju Veliyath Stock Recommendation Has Good Upside: Credit Suisse

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Srilata Rao
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Porinju Veliyath Stock Recommendation Has Good Upside: Credit Suisse

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Porinju Veliyath has recommended stocks from the media industry on the basis that it is the next big wealth creation opportunity. He sees a lot of opportunity in the media and entertainment sector as media space still doesn’t command a very high market capitalisation.

There’s a lot of growth opportunity for smaller unlisted entities to enter the space as India is a huge market with 1,300 million people and there’s hardly any market capitalisation,” Porinju Veliyath said.

He recommended two mid-cap media stocks namely Zee Media and Balaji Telefilms. He also said that Zee Media and Balaji Telefilms are held by Equity Intelligence in the portfolio. “We hold both the stocks in our portfolio (PMS),” Porinju told ET Now.

FE has reported that Credit Suisse has recommended a buy of Zee Entertainment on strong Q3 earnings. Zee Entertainment reported a 28% increase in consolidated net profit at Rs 321.72 crore for the December quarter, mainly on account of higher advertisement revenue.

Credit Suisse notes that a strong rise in advertising revenue has helped the company to report revenue ahead of estimates. The consolidated profit during the quarter stood at Rs 321.7 crore increased from Rs 250.80 crore in the corresponding period.

Credit Suisse has increased the target price of Zee Entertainment Enterprises to Rs 650 from Rs 610 earlier. Zee Entertainment shares is trading at Rs 598. Credit Suisse says that the advertising markings will sustain going forward.

The slower growth in the last four quarters was due to specific events which required advertisers to recalibrate spends. As the impact of these factors is now behind us, ad spends have bounced back strongly and the outlook remains encouraging,” ZEEL MD and CEO Punit Goenka said.

Subscription revenue during the quarter was Rs 501.69 crore compared to Rs 593.46 crore in the year-ago period. EBITDA for the quarter stood at Rs 5,944 million and EBITDA margin stood at 32.3 percent, the company said.

Advertising spends have bounced back strongly and the outlook remains encouraging. The recent cut in GST rates across a wide category of products should aid the growth,” Punit Goenka, Managing Director & Chief Executive Officer, ZEEL said.
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