Zee Entertainment Enterprises (ZEEL) Q3 24/25 earnings summary

Executive summary

• Profitability improved in Q3 FY25, with EBITDA margin rising to 16.1% (up 590 bps YoY) and PAT from continuing operations up 207% YoY to Rs 1,636 million, driven by cost control and subscription growth.

• Cash and cash equivalents stood at Rs 17.0 billion as of December 2024, including Rs 2 billion from FCCB proceeds.

• TV network share increased 40 bps YoY to 16.9%, with strong performance in Hindi movies, Marathi, and Tamil markets; ZEE5 revenue grew 8% YoY.

• Challenging macroeconomic environment and muted FMCG ad spend slowed industry growth, impacting advertising revenues.

• Appointment of Ms. Divya Karani as Independent Director for a three-year term effective January 23, 2025.

Financial highlights

• Q3 FY25 operating revenue was Rs 19,788 million, down 3% YoY; EBITDA at Rs 3,184 million, up 52% YoY; 9M FY25 EBITDA margin at 14.9% (up 410 bps YoY).

• Q3FY25 ad revenues up 4% sequentially but down 8% YoY; subscription revenues up 8.2% YoY for the nine-month period.

• Operating costs declined 10% YoY in Q3 FY25 due to efficiency and cost optimization.

• PAT from continuing operations for 9M FY25 rose 167% YoY to Rs 4,988 million.

• Content inventory and advances declined by Rs 4.3 billion during 9M FY25, reflecting optimized acquisition.

Outlook and guidance

• Management expects performance improvement momentum to continue, with growth providing operating leverage, especially in digital.

• Revenue growth acceleration is a key priority for Q4FY25 and FY26, with a focus on achieving 18%-20% EBITDA margin by FY26.

• Margin expansion now depends more on growth and operating leverage.

• Renewal discussions for a delayed B2B digital deal are underway, expected to support future revenue.

• Expectation of a busier movie release calendar in Q4, which may impact margins depending on commercial success.