CLSA sees upside risk to Zee forecasts as FIFA World Cup lifts Z5 activity

Brokerage firm CLSA has retained its positive view on Zee Entertainment Enterprises, citing a sharp increase in user activity on streaming platform Z5 during the ongoing FIFA World Cup.According to a CNBC-TV18 report, CLSA maintained its "outperform" rating on the stock and a target price of ₹125 per share. The brokerage said Z5's weekly active users have doubled since the start of the tournament, reaching a record high.CLSA also noted that Z5 has become the most-downloaded OTT platform during the World Cup period despite Zee making FIFA content available through a premium subscription model.The brokerage said Zee's strategy of distributing content across both television and digital platforms could help sustain audience growth as the tournament progresses.A key part of that strategy is the company's long-term agreement with FIFA. Zee holds rights to 39 FIFA events through 2034, including the 2026 and 2030 men's FIFA World Cups and the 2027 Women's World Cup.CLSA further highlighted Zee's claim of gaining market share in linear television viewership, which it believes could provide upside to its growth estimates for the period between FY27 and FY29.The brokerage also described Zee's valuation as attractive, noting that the stock trades at relatively low multiples compared with its long-term earnings expectations.The positive commentary comes weeks after Zee's board approved plans to raise up to ₹2,300 crore through one or more tranches to support strategic and business initiatives.The company reported a net loss of ₹102 crore in the March quarter, compared with a profit of ₹188.4 crore a year earlier. Revenue declined 7.3% year-on-year to ₹2,024.8 crore, while it reported an EBITDA loss of ₹254.8 crore.Despite the weak quarterly performance, CLSA's note suggests the brokerage sees Zee's sports and digital businesses as potential drivers of future growth. The FIFA World Cup, in particular, appears to be helping the broadcaster attract viewers and users across platforms as it looks to strengthen its position in India's competitive streaming market.Also read: Zee5 faces fan backlash over World Cup paywall, ads and ‘AI-edited’ highlights