Zee Entertainment Enterprises Limited

Zee Entertainment's digital business, ZEE5, reported a significant turnaround in Q3 FY26, achieving its first-ever positive EBITDA of INR 56.4 crores. This marks a substantial improvement from a loss of INR 136.2 crores in the same quarter last year. The digital segment's revenue surged by 73% year-on-year to INR 418 crores, driven by an expanded content offering of 39 shows and movies, including 11 original series, across 7 languages, coupled with a revised pricing strategy and improved advertising revenues. Management expressed confidence in improving unit economics and driving sustained returns on these investments.

The broadcast business demonstrated stability, with the overall linear TV landscape maintaining weekly impressions above 28 billion and a weekly reach exceeding 730 million. Zee Entertainment sustained its position as India's number 2 TV entertainment network, increasing its network share by 60 basis points year-on-year to 17.5%. Flagship Hindi GEC channel Zee TV showed strong GRP growth, while Zee Bangla regained leadership in the East. The company also reported being the fastest-growing network in the South with a 17.7% share, and Zee Marathi achieved a 33.6% market share with its new content slate.

Advertising revenues for the quarter increased by 6% quarter-on-quarter, indicating a gradual pickup in ad spends. However, on a year-on-year basis, advertising revenues were down 9%, primarily due to continued softness in FMCG spending. The 9-month advertising revenue also reflected a decline of approximately 12%. Management remains optimistic about a gradual recovery, anticipating benefits from improved network share, growth in the digital business, and increased brand-building initiatives by FMCG players.

The company's overall operating costs increased by 12% quarter-on-quarter, mainly due to higher programming costs from the preponement of ILT20 cricket matches and acquisitions of Kantara Chapter 1 and Akhanda 2. Excluding these specific items, operational costs would have declined by a mid-single-digit on a quarter-on-quarter basis. Coupled with a 15% increase in operating revenue and tight management of fixed costs, the EBITDA margin improved by 310 basis points quarter-on-quarter to 10.5%. Profit after tax stood at INR 154.8 crores, growing 2x sequentially.

The studio business released 8 movies during the quarter, including 1 Hindi and 7 regional titles, with 3 being own productions and 5 distribution deals. The company also acquired theatrical and satellite rights for Kantara Chapter 1 and Akhanda 2, contributing to a 7x year-on-year growth in other sales and services. The music business garnered over 51 billion total video views and 175 million YouTube subscribers, leveraging its new-age music catalogue and a rich library of over 18,000 songs, maintaining healthy profitability.

As of December 2025, Zee Entertainment maintained a robust liquidity position with cash and treasury investments totaling INR 2180 crores. This includes INR 500 crores in cash, INR 700 crores in fixed deposits, and INR 980 crores in liquid mutual funds. The company also reported a disciplined approach to content inventory management, with content inventory advances and deposits standing at INR 6930 crores, a reduction of INR 120 crores over the last nine months, driven by optimized acquisitions.

Regarding the ongoing arbitration with Star, management confirmed that the next hearing is scheduled for July 2026. Due to confidentiality, further details on developments could not be disclosed, and the verdict timeline remains unpredictable. On the capital allocation front, the company has deferred further drawdowns from its FCCB, stating that it will only proceed once there is full visibility on the deployment of those proceeds, indicating a cautious approach to funding.