Zee Entertainment shares can double in 12-24 months, CLSA says; stock jumps 6%

Shares of Zee Entertainment Enterprises Ltd. surged as much as 6% on Thursday, March 20, after brokerage firm CLSA projected the stock to double in value over the next 12-24 months.

CLSA currently has an "outperform" rating on the stock with a price target of ₹170, which implies a potential upside of 70%.

The brokerage said that Zee Entertainment's shares fell 55% after its proposed $10 billion merger with Sony was called off, leading to the stock trading at "rock-bottom" valuations of 8x.

Advertising-led growth will lead to Zee Entertainment's re-rating going forward, according to CLSA, who also said that India's No. 2 TV network is also ramping up its presence in the OTT space via ZEE5.

Zee Entertainment's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) margins have widened from their historical lows by 9 percentage points to hit 16% levels. By financial year 2027, CLSA expects this figure to expand by another 6 percentage points.

The company also has zero debt and cash worth ₹1,700 crore on its books.

CLSA expects Zee Entertainment's EBITDA and Profit After Tax (PAT) to grow at a Compounded Annual Growth Rate (CAGR) of 22% and 33% over financial year 2026-2027 even if the advertising revenue grows by 6% year-on-year.

The brokerage expects the stock to double over the next 12-24 months as its market cap-to-sales ratio of 1x is at a 60% to 80% discount to the Reliance-Disney JV and Sun TV.

Out of the 20 analysts that have coverage on the stock, 10 of them have a "buy", while five analysts each have a "hold" and "sell" rating.

Shares of Zee Entertainment are trading 4.6% higher at ₹104.9. The stock is down 15% so far in 2025.