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

Executive summary

• Q3 FY25 profitability improved, with EBITDA up 52% year-over-year to Rs 3,184 million and margin rising to 16.1%, driven by effective cost management and healthy subscription revenue growth.

• PAT from continuing operations grew 207% year-over-year to Rs 1,636 million, despite a weak advertising environment.

• 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 basis points year-over-year to 16.9%, with strong performance in Hindi movies and regional channels.

• ZEE5 digital revenue grew 8% year-over-year, with EBITDA loss reduced by Rs 1,078 million year-over-year and subscriber/watch time growth.

Financial highlights

• Q3 FY25 operating revenue was Rs 19,788 million, down 3% year-over-year; 9M FY25 operating revenue was Rs 61,100 million, down 6% year-over-year.

• EBITDA margin improved to 16.1% in Q3 FY25 (up 590 bps YoY) and 14.9% for 9M FY25 (up 410 bps YoY).

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

• Operating costs declined 10% year-over-year in Q3 FY25 due to efficient execution and cost optimization.

• Free cash flow to PAT ratio for 9M FY25 was 0.9x.

Outlook and guidance

• Revenue growth acceleration is a key priority for Q4 FY25 and FY26, with a focus on sustaining profitability while investing for growth.

• Margin expansion now depends more on revenue growth and operating leverage; EBITDA margin target of 18%-20% by FY26 reaffirmed.

• Management expects performance improvement momentum to continue, especially in digital, with selective investments.

• Expectation of a busier movie release calendar in Q4, which may aid revenue but introduce margin unpredictability.

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