Zee Entertainment Enterprises on Tuesday reported that its Q3 net profit rose more than double to Rs 58.5 crore from Rs 24.32 crore in Q3 FY23 after a pick-up in subscriptions offset a soft advertising environment. It reported a 15 per cent increase in income at Rs 223 crore as against Rs 194 crore in Q3 FY23.
Zee Entertainmenty reported that its advertising revenue was Rs 1027.4 crore, which was down by 3.3 per cent from Rs 1063.4 crore during the same period a year ago. The subscription revenue grew 3 per cent year-on-year to Rs 921.3 crore from Rs 894.4 crore.
Its network share dropped to 17.1 per cent from 17.9 per cent in Q2 FY24.
The Subhash Chandra-promoted company had reported a 9% growth in its consolidated net profit for the July-September quarter at Rs 123 crore compared to Rs 113 crore in the same quarter last year.
In its Q3 report, ZEE said it is confident to accelerate revenue growth as the advertising environment settles. The company now expects an 8-10% CAGR in revenue going forward while seeing margins to be "meaningfully" better in FY25.
To achieve margins of 19-20%, the company is said to have put in place some interventions, which include revisiting the overall cost structure across the business to reset to a lower cost baseline as it gets into FY25 – Tech, content, marketing, and people.
This is in contrast to what analysts had expected. Analysts expected the Punit Goenka-led company to report weak numbers, with sales falling up to 3 per cent YoY. Nuvama expected ZEE to report 5 per cent fall in ad revenues against a 3.3 per cent YoY decline in the September quarter. It anticipated subscription revenue to gradually improve for ZEE by 1 per cent YoY against 8 per cent YoY growth Q2.
Last month, Sony scrapped its much-awaited merger with Zee Entertainment, ending a deal that could have created one of the biggest TV broadcasters in India, alleging breaches of contract.
Following the Sony action, Zee refuted various alleged breaches of obligations about the merger cooperation agreement and replied to Sony saying that its claim of $90 million in damages was untenable. Its stock has fallen 22 per cent since the merger was called off.
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