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    Zee Entertainmen

    ZEELMixed
    Media, Entertainment & Publication·16 Oct 2025
    Management Summary

    Zee Entertainment reported a mixed Q2 FY26, marked by strong digital growth and strategic content investments, but continued softness in advertising revenue. ZEE5 achieved record quarterly revenue and significantly reduced its EBITDA loss, demonstrating progress towards profitability. However, overall EBITDA margins remained compressed at 7.4% due to increased operating costs. Management expressed cautious optimism for a recovery in advertising and overall profitability in the second half of FY26, while acknowledging that prior growth and margin aspirations are now challenging.

    Highlights

    9

    • ZEE5 revenues increased by 32% Year-on-Year in Q2 FY26.

    • ZEE5 achieved its highest-ever quarterly revenue, crossing INR 3,000 million (INR 300 crores).

    • ZEE5 EBITDA loss reduced by over 80% to INR 312 million (INR 31.2 crores) in Q2 FY26.

    • Advertisement revenues were 11% lower Year-on-Year but 6% up Quarter-on-Quarter.

    • Overall subscription revenue grew by 6%.

    • The company's network share increased by 100 basis points Quarter-on-Quarter to 17.8%.

    • EBITDA margins stood at 7.4%.

    • Profit after tax for the quarter was INR 765 million (INR 76.5 crores).

    • Cash and treasury investments as of September 2025 totaled INR 21.1 billion (INR 2,110 crores).

    Key financials

    Single quarter

    07 metrics
    1. 01Profit After Tax₹76.5 Cr
    2. 02EBITDA Margin7.4%
    3. 03ZEE5 Quarterly Revenue₹300 Cr+32%YoY
    4. 04Advertisement Revenue (YoY)—-11%YoY
    5. 05Advertisement Revenue (QoQ)—+6%QoQ

    Guidance & targets

    5
    CategoryTargetPriority
    Profitability
    ZEE5 Profitability
    profitability
    		Low
    Profitability
    Margins (FY26 H2)
    improving on a comparable basis
    		Medium
    Profitability
    Exit Margin Aspiration
    not even be satisfied at 12%
    		Low
    Ad Revenue Growth
    Ad Revenue Growth (FY26 H2)
    uptick
    		Medium
    Ad Revenue Growth
    Ad Revenue Growth (FY26)
    difficult to achieve 8% to 10%
    		Medium

    Risks & concerns

    5
    RiskSeverity

    Slow recovery in advertising spend and difficulty meeting prior growth targets.

    Ad revenues were 11% lower Y-o-Y, and management stated that achieving 8-10% ad revenue growth for FY26 looks difficult. — Management acknowledged

    medium

    Impact of increased operating costs on profitability and lower EBITDA margins.

    Overall operating cost increased by 9% Y-o-Y due to content and marketing investments, resulting in EBITDA margins of 7.4%. — Management acknowledged

    medium

    Strain on Zee Music business due to content moving behind paywalls by other platforms.

    Most music platforms are now putting content behind paywalls, causing some strain on the music business, though it remains healthy. — Management acknowledged

    low

    Previous high exit margin aspiration (18-20%) is now considered difficult to achieve.

    Management confirmed that the 18-20% exit margin aspiration 'does look difficult right now'. — Analyst acknowledged

    medium

    Areas of Evasion(1)

    • specific numerical guidance for H2 FY26 ad revenue growth

    Q&A highlights

    3

    “We avoid giving a specific guidance right now because we are still waiting and watching how it pans out, but in terms of the sentiment, we are hopeful right now.”

    Management expressed caution and refrained from providing specific numerical guidance for future ad revenue growth, indicating uncertainty in a key revenue segment.

    asked by Kavish Parekh from B&K Securities

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 FY26 Performance Overview

    Zee Entertainment reported a mixed Q2 FY26, with profit after tax at INR 76.5 crores and EBITDA margins at 7.4%. Overall operating costs increased by 9% Year-on-Year, reflecting strategic investments in content and new launches. While advertising revenues were down 11% Year-on-Year, they showed a 6% Quarter-on-Quarter uptick, with management expressing cautious optimism for H2 FY26.

    02

    Digital Business (ZEE5) Momentum

    ZEE5 demonstrated strong growth, with revenues increasing by 32% Year-on-Year and achieving its highest-ever quarterly revenue, crossing INR 300 crores. The platform significantly reduced its EBITDA loss by over 80% to INR 31.2 crores, aligning with the objective to achieve breakeven. This improvement is attributed to tailored subscription plans in seven languages and an enhanced content offering.

    03

    Advertising Revenue Trends and Outlook

    Advertising revenues experienced an 11% Year-on-Year decline but a 6% Quarter-on-Quarter increase, primarily driven by FMCG spending. Management noted that achieving the previously guided 8-10% ad revenue growth for FY26 now 'looks a bit difficult.' However, they anticipate a gradual recovery in H2 FY26, supported by the festive season, enhanced network share, and growth in the digital business.

    04

    Content Strategy and Costs

    The company made deliberate investments in content, leading to a 9% Year-on-Year increase in overall operating costs. These investments included 39 linear and 26 digital content launches, as well as two new GEC channels in Kannada and Bangla markets. Management views these as long-term investments to fortify leadership and expects costs to stabilize in H2, yielding higher gains in advertising and subscription.

    05

    Balance Sheet and Liquidity

    Zee Entertainment maintained a strong financial position, with cash and treasury investments totaling INR 2,110 crores as of September 2025. This includes INR 380 crores in cash, INR 690 crores in fixed deposits, and INR 1,050 crores in liquid mutual funds. Content inventory advances and deposits stood at INR 6,990 crores, a reduction of INR 60 crores since March 2025, reflecting optimized acquisition.

    06

    Promoter Stake and Shareholder Value

    Addressing analyst concerns about the falling stock price and promoter stake, management expressed a strong desire to increase their stake in the organization. Punit Goenka stated, 'we are very, very keen to increase our stake... in whichever structured manner that we can find best possible,' emphasizing that any structured transaction would require shareholder approval.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.