Zee Entertainment Enterprises Ltd on Wednesday posted a consolidated net profit of Rs 118 crore for the quarter ended June 30, 2024 (Q1 FY25), compared with a loss of Rs 53.42 crore in the year-ago period.
The broadcaster's subscription revenue increased 8.78 per cent year-on-year (YoY) to Rs 987.17 crore from Rs 907.49 crore.
Advertising revenue in the reported quarter fell 3 per cent, compared to a drop of 4 per cent in the year-ago period. Margins rose to 13 per cent from 8 per cent last year.
"Other sales and services during the quarter was aided by movie releases and higher syndication. Increase in operating cost YoY was driven by increase in programming cost partially offset by decline in technology cost," the company mentioned. "We expect gradual margin improvement to continue through the rest of the year."
Commenting on the results, Punit Goenka, MD and CEO of ZEE, said: "The results of several strategic steps implemented in the previous quarter are being witnessed gradually, and we continue to maintain a sharp focus on Frugality, Optimization, and Quality Content across the business. Timely and action-oriented interventions centred around these three key tentpoles, have enabled us to achieve a healthy growth momentum on the margin profile."
"Our focused efforts have enabled us to further strengthen our liquidity and financial position. During the quarter, we have generated strong free cash flow and our content inventory has also continued to decline, driven by optimized acquisition and movie releases. We are committed to achieving our targeted aspirations for the future, and our efforts in the subsequent few quarters will be focused towards enhancing our revenue profile with prudence and resilience at the forefront."
On the stock-specific front, Zee shares jumped 5.76 per cent to hit a day high of Rs 153.45 crore after the quarterly earnings were out.
"EBITDA increased 75.3 per cent YoY to Rs 271.7 crore (PLe Rs 246.1 crore, CE Rs 222.4 crore) with a margin 12.8 per cent (PLe 11.6 per cent) aided by fall in employee benefit expenses amid the ongoing restructuring exercise and reduction in ZEE5's losses," Prabhudas Lilladher (PL) said.
"We currently have a 'Hold' rating on Zee with a target price of Rs 160," it added.