> ZEE ENTERTAINMENT (CITI)

Buy: Gap in Ratings Narrowing = Re-Rating?

■ Gap between Zee TV and leaders narrowing — Zee TV has gained share within Hindi GEC genre over the last quarter – gained ~60-70bps channel share while other major players have lost share. According to the latest TAM data, the gap between the leaders Colors and Star Plus (both tied with 248 GRPs) and Zee TV's 234 GRPs has been narrowed considerably. ZEEL's Hindi movie channel, Zee Cinema, has remained No. 1 in its genre.

■ Zee TV becomes non film GRP leader — Zee TV's original programming ratings (i.e., ratings, ex-film based content) of 208 GRPs surpassed the top 2, Star Plus (201 GRPs) and Colors (196 GRPs), for the last week. While we don't focus on weekly GRP ratings, we do note that Zee's improvement in ratings over the last few months is encouraging.

■ New content to take on competition — Zee is trying to improve its prime time ratings by replacing soaps, Maayka and Saat Phere (~2 TVRs ratings). Both have been losing their rankings to competition over the past year and are being replaced by Aapki Antara and Pavitra Rishta (Balaji Telefilms soap -remake of popular Sun TV Tamil serial, Thirumathi Selvam). Mgmt mentioned that it would add Sa Re Ga Ma L'il Champs after Dance India Dance ends in June.

■ Sustaining market share is key — In future, sustenance of viewership share gains would be an important consideration from an ad revenue perspective. We recently upgraded ZEEL as risk reward was turning favorable (https://www.citigroupgeo.com/pdf/SAP27163.pdf) and downside relative to the market was limited. We do expect headwinds in Q1, given the muted ad market
growth & divergence of ad spends on cricket (IPL, T20 World Cup) & elections.

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