ZEE Entertainment shares surged 7% today; here's why

Shares of ZEE Entertainment Enterprises Ltd (ZEEL) climbed 7 per cent in Tuesday's trade as its Managing Director (MD) and Chief Executive Officer (CEO) Punit Goenka decided to step down from the MD role and focus entirely on his responsibilities as CEO, the company said in a BSE filing.

To recall, ZEE Entertainment had in Q2 showed string cost control, resulting in a 16.2 per cent Ebitda margin, up 250 basis points YoY. This was in line with its guidance of 18-20 per cent margin in the near term.

ZEEL said Goenka has resigned as MD to entirely focus on his operational responsibilities assigned to him by the board. He has been appointed as CEO of the company. Mukund Galgali, Chief Financial Officer, will also assume the role of Deputy Chief Executive Officer of the company.

Following the development, the stock rose 7.18 per cent to hit a high of Rs 123.80 on BSE.

Galgali has over 27 years of experience, including 17 years with the Zee group. He has been providing strategic consulting advice on business planning and performance, regulatory and tax implications on business, process innovations and management controls to improve business efficiency and value creation for shareholders, ZEEL said.

Goenka would stay on the board as a Director, pending shareholder approval, a release on BSE read.

"With this step, he intends to dedicate his time entirely towards the future of the Company by enhancing its performance and profitability levels in line with the direction given by the Board/Nomination and Remuneration Committee in its meeting dated 15th November 2024," ZEEL said.

"Goenka’s approach stems from his enhanced focus towards the core business segments and the concerted efforts required to drive robust growth for the future in the interest of all its stakeholders," ZEEL said.

It said Goenka been investing significant time and energy to enhance the value delivery from the respective businesses by conducting a structured set of visits in all language markets in order to further sharpen the company’s abilities and understanding of its consumers and their evolving preferences.

He is also working closely with the digital business teams to achieve a balanced cost structure for ZEE5 to drive sustained growth for the future, ZEEL said.

Additionally, his focus has also been to enhance the value proposition to advertisers by identifying newer monetization avenues in order to boost the advertising revenue ecosystem for the company and sector at large, ZEEL added.

Elara Securities in its Q2 review note on Zee Entertainment said ad revenue had witnessed a pickup from September, with better outlook in Q3 amid the festival season. While subscription gained momentum in , up 9.2 per cent YoY, improving margin with potential positives from legal case overhang augurs well for rerating.