Zee Shares Rise As Nuvama Sees Nearly 90% Upside After Promoter Raises Stake

Shares of Zee Entertainment rose on Friday after brokerage house Nuvama maintained a 'buy' rating with a target price of Rs 185, which indicates nearly 90% upside from the stock's current market price.

The brokerage noted that the promoters bought 2.7 million shares through open market, taking the stake to 4.28% from 3.99% earlier.

The scale of this acquisition shows belief in the long-term prospects and growth potential of the company, according to Nuvama.

The promoter's move to raise stake is set to boost confidence of minority investors, it said. Further, analysts suggest that the stock is trading at attractive valuations.

Zee's subscription revenue remains strong with seven consecutive quarters of expansion.

The ad revenue, though currently weak, could start recovering soon, according to the brokerage. This is expected to be led by urban demand recovery and higher gross margin for FMCG.

In the third quarter of financial year 2025, subscription revenue rose 6.6% year on year, driven by a pickup in Zee5 subscription. Subscription revenue growth is expected to continue for a couple of more quarters along with price hikes, according to the brokerage. It also notes an increase in the subscriber base for the digital business.

Ad revenue continued to face the heat from a muted macro environment with the urban slowdown particularly affecting FMCG companies, said Nuvama.

Analysts expects ad spends to improve with falling crude prices increasing the wallet share towards ad spends. Zee has reduced its dependence on national brands, notes the brokerage. FMCG still contributes 60%, but within that chunk, local FMCG is attaining a reasonable size.

Further, these locals are willing to pay a 50% premium over national counterparts. Focus of the brokerage is on four verticals: linear, digital, movie, and music. Gaming is a big opportunity that the company is evaluating and the company is open to any inorganic opportunities.

In the fourth quarter, Zee expects to make good strides on the margin front. Key focus growth area will be investment, movie launches and revenue, according to the company. 

Rural local advertisement spends have improved in the third quarter. The language market is making a comeback and retail is large thereof.

Zee share price rose as much as 2.62% during early trade on Friday to Rs 100.75 apiece on the NSE. It was trading 2.54% higher at Rs 100.67 apiece, compared to a 0.06% decline in the benchmark Nifty 50 as of 9:33 a.m.

It had fallen 37.22% in the last 12 months. The relative strength index was at 47.3.

Ten out of the 20 analysts tracking the company have a 'buy' rating on the stock, five have a 'hold' and five suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 149.7, implying an upside of 52.3%.