- Date : 03/03/2023
- Read: 2 mins
Will Zee Entertainment pay back the loan or default? Let's look at the financials.
Zee Entertainment has seen a 20% fall in its share price since the beginning of 2023. It is because IndusInd Bank has filed a petition reporting an Rs. 83.1 crores loan default by Siti Network (Zee Entertainment subsidiary) in the bankruptcy court. Investors are questioning the company's financials and wondering whether it will default or pay on loan. Let's see!
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Are The Financials Solid?
The company had an Rs. 24.30 crores net profit in the December quarter of last year. It was a 92% fall from the last year in the same period. The reasons behind the fall were:
- Siti Networks receivables
- Zee Learn insolvency case provision adjustment
- Talent retention plan one-time bonus
Its debt balance was Rs. 29.6 crores in the December quarter last year, increasing by 288% since March 2022. However, the other borrowings/lease liability in December 2022 is less than 1.5%. The previous year the finance cost was Rs. 13.14 crores and witnessed a 344% increase yearly. The December quarter of 2022 saw operating profits at Rs. 33.80 crores, 29.5% less than the previous year. Ad revenue weakened because of a dip in Hindi movies and soft Marathi performance. Analysts are concerned about the company's financial metrics due to rising finance costs and financials. However, they are comfortable with revenue growth, robust subscription business, and debt levels.
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Here are a few key points investors must know:
- IndusInd Bank has filed a petition reporting an Rs. 83.1 crores loan default by Siti Network (Zee Entertainment subsidiary) in the bankruptcy court.
- NCLT Mumbai bench accepted the petition and ordered insolvency proceedings.
- Punit, Zee Entertainment CEO, pleaded for relief against the proceedings with NCLAT, and the NCLAT accepted the plea. The proceedings got a stay order.
- NSE (National Stock Exchange) banned Zee Entertainment shares from trading. The ban was in the Futures and Options.
- The NSE lifted the ban through a notification on February 27, 2023.
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.
