Zee Entertainment Enterprises (ZEEL) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw improved operating performance, with margin growth driven by cost optimization and quality content focus.

• Consolidated revenue from operations for Q1 FY25 was ₹2,14,952 lakhs, up from ₹1,99,826 lakhs in Q1 FY24.

• Profit after tax from continuing operations rose to INR 1,257 million, with strong free cash flow and declining content inventory.

• Net profit for the quarter was ₹11,810 lakhs, a significant improvement from a loss of ₹5,342 lakhs in Q1 FY24.

• Strategic fundraising was completed to support both organic and inorganic growth, strengthening the financial foundation.

Financial highlights

• EBITDA margin improved by 500 bps year-over-year.

• Advertisement revenue for Q1 FY25 was ₹91,134 lakhs, subscription revenue ₹98,719 lakhs, and other sales/services ₹23,200 lakhs.

• Employee costs reduced by about 13% to INR 25 crore in Q1.

• Basic and diluted EPS from total operations for Q1 FY25 was ₹1.23, compared to a loss per share of ₹0.56 in Q1 FY24.

• Exceptional items for the quarter included restructuring and merger-related costs totaling ₹2,860 lakhs.

Outlook and guidance

• Cautiously optimistic about macroeconomic improvement and advertising spend recovery in H2 FY25, especially with festive season and rural demand initiatives.

• Expect gradual growth in linear subscription revenue, inflation-linked price increases planned.

• Management does not expect any material adverse impact from ongoing legal and regulatory matters, including disputes with Culver Max (Sony) and Star India.

• Digital business (ZEE5) growth rate expected to rebound in H2 as cost structure stabilizes.

• Further improvement in ZEE5 cost structure anticipated, with medium- to long-term loss reduction.