MAM
Ad environment muted; growth led by subscribers
Mumbai: Zee Entertainment (Z IN) posted ad. revenue drop of 3.5 per cent YoY in H1, as demand environment was volatile despite recovery in ad spend. We estimate H2FY24E to report ad spend growth of mere 5-6 per cent YoY, as large portion of spends could be diverted to sports due to the Cricket World Cup (CWC). Subscription revenue was strong due to NTO 3.0, which led to price hikes after three years. Expect growth to be in the range of 7-8 per cent YoY in H2FY24E as well. Overall revenue grew a sharp 20.2 per cent YoY, largely led by performance of Gadar 2, excluding which overall revenue grew mere 5.4 per cent YoY. Zee5 also reported a revenue growth of 59 per cent YoY to Rs 2,652mn, helped by a syndication deal. Z gained viewership share in linear TV too, as its share grew 90bps QoQ to 17.9 per cent, helped by gain in selective regional genres.
Probability of merger going through high
Z’s share price performance will largely be led by valuation re-rating, hinged on the merger with Sony. The recent order passed by SAT allows Punit Goenka to remain the CEO of the merged entity, but the SEBI may continue to investigate Punit Goenka. As per our assessment (https://tinyurl.com/2wu5bxc7), the probability of the merger going through is high, with or without Punit Goenka, unless he does not change his stance (maintaining his view that he will give utmost importance to the merger going through for shareholder interest, even if he has to let go of his designation as CEO of the merged entity). Per our legal checks, there is a low likelihood of Sony wanting Goenka to remain as CEO, until the investigation outcome is known; further, the investigation outcome may take 12-15 months and Sony may not wait that long for the merger to be executed. This potentially increases the risk for Z/Sony merger, which may lead to valuations being under check.
Valuation: Reiterate Buy; TP unchanged at Rs 340
We reiterate buy with SoTP-TP of Rs 340 (unchanged) after factoring in merger synergies and potential medium-term play backed by the strength of Z and Sony in the TV and OTT businesses. We assume a cash infusion of $1.5bn by Sony and value the merged company broadcasting business at 20x (unchanged) one-year forward P/E and the OTT business at 4.0x one-year forward EV/sales. Our PAT estimate incorporates potential OTT losses.
The credit for this article goes to Elara Capital Sr VP – research analyst (media, consumer discretionary & internet) Karan Taurani.
Brands
Trump announces $300bn Texas oil refinery with Reliance, calls it the biggest in US history
First new US refinery in 50 years planned at Brownsville port with Reliance
WASHINGTON: The United States may soon see the first brand-new oil refinery built on its soil in half a century.
Donald Trump announced a proposed $300 billion refinery project in Texas, calling it a landmark moment for American energy production and jobs.
Posting on Truth Social on 10 March, Trump said the facility would be built at the Port of Brownsville and developed by a company called America First Refining, with major investment from India’s Reliance Industries.
The announcement frames the project as a centrepiece of the administration’s push for “energy dominance”, with Trump claiming it would deliver thousands of jobs and billions of dollars in economic activity to South Texas.
If realised, the plant would mark the first all-new major refinery constructed in the United States since the 1970s. In recent decades, oil companies have largely chosen to expand existing facilities rather than build new ones, citing high costs, regulatory hurdles and environmental scrutiny.
Trump described the proposed investment as the “biggest in US history”, positioning it as proof that policy changes such as streamlined permits and lower taxes are drawing large-scale energy investments back into the country.
The refinery is planned for the Port of Brownsville, a strategic Gulf Coast location that provides easy access to shipping routes and export markets.
A key partner in the project is Reliance Industries, controlled by billionaire industrialist Mukesh Ambani. The company already runs the world’s largest refining complex in Jamnagar, India, making it one of the most experienced operators in large-scale petroleum processing.
The Texas venture would mark a significant step for the group into America’s domestic refining sector, potentially strengthening industrial ties between the US and India.
The proposed refinery is being promoted as a next-generation facility capable of processing American shale oil while maintaining high environmental standards. Trump said it would be “the cleanest refinery in the world”, although the specific technologies behind that claim have not yet been detailed.
Industry observers also note that the $300 billion figure is unusually large for a refinery project, and analysts are waiting for more clarity on whether the number reflects total construction costs, long-term infrastructure investment, or broader economic impact estimates.
As of 11 March, Reliance Industries had not publicly confirmed the investment size or the structure of its involvement.
For now, the announcement has sparked equal parts excitement and curiosity in energy markets. If the plan moves from promise to pouring concrete, the refinery could reshape the Gulf Coast energy landscape, and reopen a chapter in American refining that has been quiet for nearly fifty years.
