Zee Entertainment Enterprises has reported a consolidated net profit of Rs 118.10 crore for the first quarter ending June 30, 2024, a notable recovery from the net loss of Rs 53.4 crore recorded in the same period last year.
The company’s consolidated total income increased by 7.6% in Q1 FY25, reaching Rs 2,150 crore compared to Rs 1,998 crore in Q1 FY24. ZEEL’s total expenses slightly increased in the June quarter of FY25, reaching Rs 1,941.12 crore.
Zee experienced a 3% decline in advertising revenue for Q1, amounting to Rs 911 crore, down from Rs 940.91 crore in the same period last year. Subscription revenue increased by 8.7%, rising from Rs 907.49 crore to Rs 987.19 crore year-on-year.
On the digital side, ZEE5’s revenue surged 15.3% to Rs 223.7 crore, up from Rs 193.9 crore in the previous year.
The company’s EBITDA increased by 75.3% year-on-year, reaching Rs 271.7 crore.
The Company said, “While Q1 has already started on a positive note with significant step up in margins, we expect gradual margin improvement to continue through the rest of the year. Overall cost discipline and prudence will continue to hold us in good stead. Also, magnitude of margin improvement will be dependent on ad revenue pickup in H2 FY25. FY25 margins to be meaningfully better than FY24. In FY26, we aspire to deliver industry-leading 18-20% EBITDA margin.”
Karan Taurani, Senior Vice President and Research Analyst (Media, Consumer Discretionary and Internet) at Elara Capital, said, “We expect ad revenue momentum to pick up in the near term, helped by positive impact from the festive season, higher spends by FMCG companies and traction in regional GECs. Ad revenue for Zee may grow in the range of 3-5% YoY in the near-to-medium term, as TV medium shows resilience amongst other traditional media genres.”
Furthermore, he said that EBITDA margin may see further acceleration, helped by better ad growth in the festive season and consistent cost cutting initiatives. Losses in the digital business (Zee5) has come down by 48%, as quarterly loss is now at Rs 1,777 million (reported), versus an average quarterly loss of Rs 2,718 million (average of past four quarters).
“We believe it is also likely that Zee may acquire channels of RIL/Disney, if viewership share or market share in certain genres is high and is not approved by CCI (Competition Commission of India). As per our assessment, RIL/Disney have bigger overlaps in the urban GEC genre, which is Zee’s weakness, given the latter’s strength in the regional markets. The cash infusion can also be used to acquire potential digital assets/OTT platforms. We believe there is a high likelihood of the funds being deployed for inorganic purposes, than organic,” he added.
