Zee Telefilms was the biggest loser among BSE Sensex stocks on Friday on selling pressure from operators.

The scrip of the media major shed 4.32% to Rs 75.25 on the BSE by 12:50 IST. A volume of over 1.4 million shares was recorded on the BSE. Earlier in the session, the scrip declined from its high of Rs 79.35. In the four sessions, the scrip has lost 12.2% from Rs 85.70 on 5 May 2003. Earlier, between 28 April and 5 May 2003, it rose by 31% from Rs 65.55.

Dealers said that today's fall on the Zee Telefilms counter was due to sustained offloading by operators, who had built huge positions in the last few sessions.

The fall in the scrip was also attributed to rumours that the company's revenues will be hit as INCable has disconnected Zee channels from its network. The said cable operator is protesting against the Conditional Access System to be introduced this year. But, according to rumour mills, the black out of Zee channels is due to the cable operator not paying his dues to the company.

Players feel the implementation of the CAS regime from 14 July 2003 will benefit ZTL by improving its subscription revenues.

Earlier, ZTL announced its results which beat expectations. For Q4 ended 31 March 2003, on a consolidated basis, it recorded a massive 75% rise in net profit to Rs 92.54 crore on a 15.8% increase in total sales to Rs 368.47 crore (Rs 3.68 billion). The company recorded an extraordinary expense of Rs 38.61 crore (as against nil in Q4 of last year), after which net profit was merely 2% higher at Rs 53.93 crore.

The results have beat projections of a capitalmarket.com poll of analysts - a net profit of Rs 55-75 crore and net sales of Rs 288-326 crore (Rs 2.88-3.26 billion).

For 2002-03, the company's net profit, on a consolidated basis after adjusting for extraordinary expenses, rose by 16.6% to Rs 227.03 crore (Rs 2.27 billion) on a 10.5% increase in total sales to Rs 1,199.32 crore (Rs 11.99 billion).

For Q4 (on a standalone basis), the company recorded a massive 134.65% rise in net profit to Rs 32.57 crore on an 8.6% increase in total revenue to Rs 150.98 crore (Rs 1.5 billion). Net profit rose due to a massive cost-cutting exercise. For the quarter, total expenses declined by 17.2% to Rs 84.82 crore. For the year (on a standalone basis), the company posted a net profit of Rs 87.49 crore on total income of Rs 497.44 crore (Rs 4.97 billion).

But analysts pointed out that the growth in profitability is largely due to cost-cutting exercise. Future growth of the company continues to be a cause for concern.

ZTL has also said that the business environment (in 2003-04) continues to be challenging in terms of advertising revenues, which are dependent on macro economic factors and the business confidence of major advertisers. However, the company remains confident that subscription revenues will continue to grow. It does not anticipate any lasting impact of the Cricket World Cup on advertising revenues, which has been evident in the few weeks since the culmination of the event.

As on 31 March 2003, promoters held 51.77% stake in ZTL, while the public and institutions held 9.83% and 33.53% respectively.

BSE code: 505537