ZEEL shares: Nuvama retains 'BUY', ups target price on EBITDA margin expansion

Nuvama Institutional Equities expects Zee Entertainment Enterprises Ltd (ZEEL) to improve its financial performance with a target EBITDA margin of 18-20 per cent for FY26. This goal marks a significant increase from the 14.4 per cent margin in FY25, driven primarily by cost-control measures and a substantial reduction in EBITDA losses from Zee5. The company plans to reduce these losses by up to 60 per cent, following a 50 per cent year-on-year (YoY) reduction in FY25.

The domestic brokerage has retained a 'BUY' rating on ZEEL, setting a target price of Rs 178, signalling confidence in the company's strategic direction. The organisation anticipates a rebound in advertisement revenue, projecting an 8-10 per cent YoY growth after experiencing an 11 per cent decline in FY25.

In terms of financial positioning, ZEEL reported a significant increase in its cash and cash equivalents as of March 31, 2025. The figures were up by 102 per cent, reaching Rs 2,410 crore, which is around 19 per cent of its market capitalisation (m-cap).

Nuvama underscored that a key development for ZEEL is its new strategic equity partnership with Bullet, a contemporary content and technology start-up. This collaboration aims to leverage Bullet's innovative capabilities to enhance its content offerings and technological infrastructure.

On June 16, 2025, ZEEL's board will convene to review its business plans over the next three to five years. The agenda includes potential fundraising options and strategies for risk mitigation, which are crucial for sustaining growth and capitalising on market opportunities.

ZEEL's efforts to improve EBITDA margins and strengthen its financial base come amid a challenging market landscape, the broking firm stated, adding that the company remains committed to achieving its financial objectives while exploring innovative solutions to drive growth.

The outlook for the company appears promising as it aligns its business strategies with emerging trends and opportunities.

On the stock-specific front, ZEEL was last seen trading 2.23 per cent higher at Rs 137.55 on Friday.