Summary
Zee Entertainment Enterprises Limited - Q3 FY26 Earnings Call Summary Thursday, January 22, 2026, 5:00 PM IST
Event Participants
Executives 4 Ankit Arora (Head of Investor Relations), Mukund Galgali (Deputy CEO & CFO), Punit Goenka (CEO), Vikas Somani (Senior Management)
Analysts 4 Dixit Doshi (Whitestone Financial Advisors), Kavish Parekh (B&K Securities), Sameer Gupta (IIFL Capital), Umang Mehta (Kotak Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Digital Revenue (ZEE5) | ₹418.0 crores | +73.0% YoY; Highest quarterly revenue to date, aided by syndication and telco renewals. |
| Digital EBITDA | ₹56.4 crores | First ever positive EBITDA quarter; compared to a loss of ₹136.2 crores YoY. |
| Subscription Revenue | 7% YoY growth | Driven by digital business and successful renewals of BPO contracts in Broadcast. |
| Advertising Revenue | ₹[Not Disclosed] | -9.0% YoY / +6.0% QoQ; Showing gradual sequential recovery despite FMCG softness. |
| Network Share | 17.5% | +60 bps YoY; Maintained position as India’s No. 2 TV entertainment network. |
| PAT | ₹154.8 crores | +100% QoQ (2x growth); Driven by ZEE5 turnaround and tight cost management. |
| EBITDA Margin | 10.5% | +310 bps QoQ; Improved via operating leverage despite higher programming costs. |
| Cash & Investments | ₹2,180 crores | Includes ₹500cr cash, ₹700cr FD, and ₹980cr in liquid mutual funds. |
| Inventory & Advances | ₹6,930 crores | -₹120 crores over 9 months; Reflects disciplined and optimized content acquisitions. |
Geographic & Segment Commentary
- Digital (ZEE5): The segment achieved its first profitable quarter with 39 releases (11 originals) across 7 languages. Growth was bolstered by a revised pricing strategy, a new “KidZ” vertical, and a catch-up revenue adjustment from a telecom partner. Even excluding one-time items, the business reached approximately breakeven.
- Broadcast & Linear TV: Network share improved to 17.5%, with Zee Bangla regaining leadership in the East and Zee Marathi achieving a 33.6% market share. The network remains the fastest-growing in South India with a 17.7% share.
- Studios & Music: Zee Studios released 8 movies (3 owned, 5 distributed) and acquired major rights for Kantara Chapter 1 and Akhanda 2. The Music business garnered 51 billion video views on YouTube, maintaining healthy profitability through a library of 18,000+ songs.
Company-Specific & Strategic Commentary
- Cost Optimization: The company implemented an omnichannel strategy resulting in headcount rationalization and the removal of redundant positions across linear and digital verticals.
- Strategic Investments: Launched “Bullet,” a micro-drama app that gamifies the viewing experience, and “KidZ” on ZEE5 to target younger demographics.
- Syndication Focus: Management is aggressively pursuing the syndication vertical, which contributed to a 7x YoY growth in “Other Sales and Services” revenue.
- ESG Leadership: Achieved an S&P Global CSA score of 51/100, ranking in the top 5% of global media and entertainment players.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Advertising Growth | Inflection point in next few quarters | Expecting gradual recovery as FMCG spends return to brand-building and GST cuts take effect. |
| ZEE5 Profitability | Sustained returns in medium term | Management expects ZEE5 to remain the fastest-growing vertical with improving unit economics. |
| Margins | Improvement over FY26 exit | Focus on maintaining the current lean cost structure while leveraging revenue growth. |
| FCCB Drawdown | Deferred | Next tranches of the FCCB are on hold until there is full visibility on the deployment of proceeds. |
Risks & Constraints
| Risk | Context |
|---|---|
| Star Arbitration | The legal dispute regarding the cricket sub-licensing deal is ongoing; the next hearing is scheduled for July 2026, delaying the verdict. |
| FMCG Ad Spends | While sequential growth is visible, YoY advertising revenue remains down 9% due to continued softness in FMCG brand-building budgets. |
| Content Costs | Q3 operating costs rose 12% QoQ due to the preponement of ILT20 matches and high-value movie rights acquisitions. |
Q&A Highlights
Advertising & Margins
- Question: What are the growth targets and EBITDA margin expectations for FY27? (Kavish Parekh)
- Answer: It is too early for specific FY27 numbers, but the company is optimistic about an inflection point in ad growth. Current cost structures are at their “leanest” to maintain market share while driving margin improvement (Punit Goenka/Ankit Arora).
ZEE5 Sustainability
- Question: Was the ZEE5 breakeven sustainable or driven by one-offs? (Dixit Doshi)
- Answer: While there was a “catch-up” revenue from a telco deal and syndication income, ZEE5 still achieved breakeven on an underlying basis. The business has a sustainable ARR of over ₹1,000 crores (Vikas Somani/Ankit Arora).
Legal Proceedings
- Question: What is the status of the Star Arbitration and the Jio-related disclosures? (Umang Mehta)
- Answer: Due to confidentiality, specific developments cannot be disclosed. The proceedings were adjourned with the next hearing now set for July 2026 (Mukund Galgali).
Operational Costs
- Question: What was the absolute impact of ILT20 and movie acquisitions on costs? (Umang Mehta)
- Answer: Total operating costs would have declined by mid-single digits QoQ if these items were excluded. Specific ILT20 costs are confidential (Ankit Arora).
Key Takeaway
Zee Entertainment delivered a pivotal quarter marked by its digital business (ZEE5) reaching EBITDA breakeven for the first time, supported by a 73% YoY revenue surge to ₹418.0 crores. While advertising revenue remains down 9% YoY due to FMCG softness, a 6% sequential recovery suggests the beginning of a turnaround, further supported by a 60 bps gain in network share to 17.5%. The company has aggressively rationalized its cost base through an omnichannel restructuring and is pivoting toward high-growth niches like micro-dramas (Bullet) and kids’ content. Management remains focused on maintaining a lean operational structure to ensure that as ad spends recover, operating leverage drives significant margin expansion. Looking forward, the July 2026 arbitration hearing regarding the Star deal remains a key monitoring point for the balance sheet.
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