Zee Entertainment is “cautiously optimistic” about its advertising outlook in FY26 after the company reported a 14% year-on-year (y-o-y) drop in June quarter (Q1) revenue to Rs 1,825 crore on Tuesday. Net profit for the quarter rose 22% y-o-y to Rs 144 crore, led by lower costs and a one-off loss in the year-ago period.
“We don’t change our guidance mid-year. We will work towards our guidance of 8-10% increase in advertising revenue for FY26,” Punit Goenka, CEO, Zee Entertainment, said during a post-earnings call on Tuesday. Goenka also noted that consolidation in the media industry offered advantages rather than disadvantages.
“From four players, we are down to about three players, which is a benefit, because it helps existing players to negotiate better with advertisers and distribution platform operators,” Goenka said.
Ad revenue slips
Zee’s revenue from advertising — which accounts for nearly 40% of its total revenue — was 16.8% below last year, marking its eleventh decline in the past twelve quarters, analysts tracking the company said. Zee’s revenue from other sales reduced by 63%, while its subscription revenue remained flat during the quarter. Its focus on cost-cutting and frugality helped reduce its expenses by 15% in Q1.
However, a shift in ad budgets to sports media platforms on account of the Indian Premier League, which began on March 22 and concluded on June 3, coupled with subdued demand especially from fast-moving consumer goods (FMCG) advertisers, weighed on non-sports broadcasters during the June quarter, analysts said.
The company also said that there was “no change” in its business plans after shareholders blocked a proposal by promoters to infuse funds into the company recently. The Rs 2,237-crore fund infusion would have allowed the promoters to increase their stake from 3.99% to 18.39% over 18 months.
“Nothing changes as far as our plans are concerned. We are committed towards our new initiatives (re-entering sports and making new acquisitions) as well as strengthening our core business,” Mukund Galgali, deputy CEO and CFO, said on the investor call.
Business plans
The company also said that it had increased TV viewership share in the June quarter, touching 16.8% for the period. The month of June alone had seen TV viewership share touch 17.8% and the ongoing month of July had seen TV viewership share cross 18%.
Core losses in Zee’s streaming service, Zee5, narrowed 63%, while revenue rose 29.6%, boosted by new content releases on the platform.
Galgali said that the company would continue to prioritise growth, profitability and cash generation in the coming quarters. The company was also working on new initiatives, both in the fiction and non-fiction programming spaces, which would be unveiled in the second half of the year.