Buy Zee Entertainment Stock, Says Sharekhan
Sharekhan has set a price target of Rs 310 on Zee Entertainment’s stock with a call to buy, compared to the current market price of Rs 256.
Recently, Zee Entertainment’s largest shareholder, Invesco demanded a reconstitution of the board of directors, with the removal of three directors and the appointment of six independent directors. “We expect greater clarity at the extraordinary general meeting and are closely monitoring whether Punit Goenka continues as CEO and CEO of the company given the low stake of the promoter’s family (less than 4%) in Zee Entertainment We believe regardless of any development relating to Punit Goenka would be viewed as positive by investors, although retaining Punit Goenka as Managing Director and CEO would avoid any setback in business, âthe brokerage said.
“We believe shareholder activism would be a key trigger for the reassessment, as it could change the board / management, increase the cash conversion and improve the efficiency of capital allocation,” said Sharekhan.
The brokerage also said that free cash flow for fiscal year 2021 of Rs. 1,342 crore was 75% of EBITDA, implying a strong improvement in cash conversion compared to years previous ones. “We expect earnings to yield an 18% CAGR in FY2021-FY2024E. We maintain a buy on the stock with a revised price target of Rs 310, given reasonable valuations and expectations. improving corporate governance standards, âthe brokerage said.
Buy GNA axles, Says Sharekhan
Sharekhan is also bullish on GNA Axles’ stock. According to the brokerage, the company is well positioned to benefit from a marked improvement in sales of commercial vehicles in all geographies and a good outlook for the agricultural sector.
âGNA is seeing strong traction from domestic and global original equipment manufacturers, driven by the recovery of the HP market in the US and Europe and the tractor market in India. The outlook remains positive with a strong recovery expected for fiscal years 2022E and 2023E, driven by the normalization of economic activities. Operating profit margin would increase due to operating leverage and cost control measures. We have increased our earnings estimates for fiscal 2022E and fiscal 2023E by 1.4% and 9.4%, respectively, and introduced estimates for fiscal 2024E, âthe brokerage said.
The stock is trading at a P / E multiple of 13 times and EV / EBITDA multiple of 7.6 times its estimate for fiscal year 2023E, which is slightly above the long-term average multiples. We believe that the premium valuation is justified, given the upward cycle of the domestic CV segment and the good growth momentum in exports and agricultural segments. We are maintaining our buy rating on the stock with a revised price target of Rs. 948.
The above actions are taken from Sharekhan’s brokerage report. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technology, the author and the brokerage are not responsible for any losses caused as a result of decisions based on the article. Please consult a professional advisor.