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Strong Q2 performance lifts ZEEL to 52-week high

MUMBAI: A strong financial performance for the quarter to September 2013 coupled with perky investor sentiment helped Zee Entertainment Enterprise Limited (ZEEL) script a success story on the bourses. The counter recorded a 52-week high before ending the session at Rs 267.10, up 5.49% on the BSE.

Continuing its fourth consecutive day of gains, ZEEL’s market cap crossed Rs 27,000 crore ( Rs 270 billion) today – the largest amongst the media and entertainment companies in India.

The fiscal second quarter performance beat market expectations as ZEEL’s net profit grew 26% to Rs 236.3 crore ( Rs 2.36 billion), translating into a PAT (profit after tax) margin of 21.5%.

“The market anticipated a PAT of Rs 205. As ZEEL reported a higher cap, the market reacted positively. Investors are upbeat as the company is expected to outperform the industry in registering growth,” says an analyst at a broking firm.

ZEEL-on-the-rollZEEL’s quarterly consolidated EBITDA grew 28.2% to Rs 310.5 crore ( Rs 3.11 billion) on a turnover of Rs 1,101.3 crore ( Rs 11.01 billion), up 15.5% over the year-ago period.

ZEEL’s share price has been on the upswing for some time now. Last week, the scrip added nearly 2% supported by strong volumes. The company recently received shareholders’ nod for bonus issue of preferential allotment, which further revved up the sentiment.

Almost a year ago, ZEEL resumed its upward momentum on the bourses. Before that, i.e. in the first half of 2012, the company’s shares were languishing between Rs 110 to Rs 150. Trader participation remained subdued during the narrow range movement in price, leading many to feel that the scrip was being under-valued. However, as the digitisation process picked up, ZEEL resumed its upward journey.

Average traded volume on the counter remained in excess of 20,00,000 shares (2 million shares) in the current fiscal. After a small dip last month, the volumes have already crossed 30,00,000 shares (3 million shares) in the current month. Following the result announcement, the counter gathered momentum. Its traded volume soared to 86,86,000 on the National Stock Exchange (NSE).