Roy said Zee trades at around 11 times 2026-27 (FY27) earnings, or about seven times after adjusting for its ₹2,200 crore cash pile. However, he believes the stock needs greater clarity on the Securities and Exchange Board of India (SEBI)-Securities Appellate Tribunal (SAT) matter and its arbitration with Star before it can outperform its peers.
“There are two monitorables currently for the stock, which are both frankly a bit non-fundamental. One is of course the SAT hearing… Second, of course, is the arbitration which is happening with Star on the sports event,” Roy said.
Despite these overhangs, Zee’s underlying business is improving. ZEE5 reported 58% revenue growth and turned profitable at the earnings before interest, taxes, depreciation and amortisation (EBITDA) level, while subscription revenue also grew strongly. Roy expects this momentum to continue in FY27, with subscription revenue more than offsetting weakness in advertising.
“The main driver for Zee is clearly subscription,” Roy said, adding that advertising has declined for 11 quarters as viewers and advertisers shift from traditional television towards over-the-top (OTT) and digital platforms.
He expects advertising weakness to persist in the near term, although a recovery could follow as geopolitical concerns ease and advertisers return. Overall revenue growth was around 4.5% in the latest quarter, and Roy expects subscription growth to remain the key driver.
In the broader media space, Roy continues to prefer PVR and Saregama over Zee. He sees PVR as a tactical opportunity as cinema occupancy, ticket prices and the content cycle improve.
“We will see good numbers in Q2 and Q3 also because pipeline of Hollywood is small. Regional is also doing well. Hindi also, mostly, has stabilised,” Roy said.However, he cautioned that PVR remains more of a tactical buy than a long-term compounding story until institutional investor confidence returns to the media sector. The industry continues to face concerns around disruption from OTT platforms.
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Roy is also positive on Saregama, citing strong growth in its core business over the past three quarters. He said the company’s decision to deprioritise its events business is another positive, while valuation remains comfortable.
For Zee, therefore, improving fundamentals and a low valuation provide potential upside, but Roy believes investors will need to wait for clarity on the regulatory and arbitration issues before the stock can move higher in the pecking order.
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