ZEE Entertainment Q3 results preview: Profit may fall sharply; market share may decline QoQ

ZEE Entertainment Enterprises Ltd (ZEE) is all set to announce its quarterly results today. Analysts are largely expecting the Punit Goenka-led company to report a weak set of numbers, with sales falling up to 3 per cent YoY. They see ZEE's market share falling due to the Cricket World Cup event in the first half of the quarter

Nuvama expects ZEE to report 5 per cent fall in ad revenues against a 3.3 per cent YoY decline in the September quarter. It anticipates subscription revenue to gradually improve for ZEE by 1 per cent YoY against 8 per cent YoY growth Q2. "We expect Zee5 losses to widen sequentially due

to higher revenues due to one-offs in the September quarter. With no big movies in terms of content, it expects movie revenues to fall sharply for ZEE.

This brokerage sees adjusted profit to fall 44.7 per cent YoY to Rs 104.40 crore against Rs 188.90 crore YoY. Revenue is seen falling 2.2 per cent YoY to Rs 2,062.40 crore.

Emkay Global, which sees ZEE's profit at Rs 108 crore, said other sales and services should see a sharp sequential drop on account of the higher base in Q2FY24. ZEE's market share should also be negatively impacted by the major cricket event in the first half of the quarter. Its margins are likely to decline on a sequential basis owing to lower revenues, the brokerage said.

Ad revenue recovery remains gradual and we expect a decline of 3.5 per cent YoY, it said adding that market share should decline sequentially, owing to the cricketing event.

"We expect flat YoY growth in subscription revenue, as Q3FY23 saw one-off revenue of Rs 48.50 crore. Other sales and services revenue should also decline sharply, by 70 per cent QoQ, due to no major movies. Consolidated revenue should decline 11 per cent QoQ due to lower revenue from other sales and services. Ebitda margin should decline to 11 per cent from 13.6 per cent in Q2FY24, given lower revenue," Emkay said.

ICICI Securities said subscription revenue may remain flattish at Rs 890 crore and advertisement revenue to grow sequentially by 3 per cent but decline 5.2 per cent YoY to Rs 1,008 crore. “We believe given the sports dominated quarter, allocation to sports channel would have increased compared to GEC. We estimate Ebitda to decrease by 36.1 per cent QoQ (down 37.1 per cent YoY) to Rs 210 crore in Q3FY24," ICICI Securities said. The domestic brokerage said that ad revenue performance is showing signs of recovery.

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