Zee Entertainment swings to black in Q1

Media firm Zee Entertainment reported better-than-expected earnings for the June 2024 quarter (Q1FY25) amid a pick-up in subscription revenue. The company reported a consolidated net profit of Rs 118 crore in the June quarter on Wednesday versus a loss of Rs 53.4 crore reported in Q1FY24.

Bloomberg consensus estimates had pegged net profit for the quarter at Rs 97 crore. Revenue in Q1 rose 7.4% year-on-year (y-o-y) to Rs 2,131 crore, which compares favourably with a Bloomberg consensus estimate of Rs 2,119 crore for the period. While Zee’s domestic ad revenue for the quarter declined by 3.6% due to the IPL and general elections, subscription revenue saw an uptick, touching Rs 102 crore for the June quarter.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) was up 70% y-o-y to Rs 271 crore amid cost rationalisation measures that the firm undertook in June quarter. Street estimates had pegged EBITDA for the quarter at Rs 222 crore. EBITDA margins expanded 500 basis points (bps) to 12.8% from 7.8% reported last year.

In an investor presentation on Wednesday, Zee said that it saw “meaningfully better” margins for FY25 versus FY24. Zee has said that it is aiming to deliver EBITDA margins between 18% to 20% in FY26 as part of its turnaround plans.

“The results of several strategic steps including frugality, optimisation and quality control is being witnessed gradually. Our efforts will be focused towards enhancing our revenue profile, while staying committed towards our targetted aspirations for the future,” Punit Goenka, MD & CEO, Zee Entertainment said during its Q1 earnings call on Wednesday.

Shares of Zee Entertainment gained as much as 6% post the results announcement on the BSE on Wednesday. It finally closed up 2.58% on the BSE at Rs 148.85 apiece. Financial Express