Zee Q3 Results: Profit Drops 52% from Previous Quarter, Fails to Meet Expectations

Zee Entertainment Enterprises Ltd.’s third-quarter profit fell by more than half sequentially and failed to surpass market expectations. This was due to higher costs denting the company’s margin. According to an exchange filing on Tuesday, the net profit saw a 52.4% decrease quarter-on-quarter to Rs 58.5 crore in the October-December period. This was below the Rs 90.54-crore consensus estimate of analysts tracked by Bloomberg.

Ebitda also witnessed a decline, down 38% at Rs 209.2 crore versus Rs 337.4 crore, as per Bloomberg’s estimate of Rs 209 crore. The margin narrowed by 359 basis points to 10.22% compared to the Bloomberg estimate of 10%. The company mentioned in the exchange filing that it may face pressure on margin due to incurring one-time higher costs towards implementing interventions. It also stated that gradual margin improvement will kick in, and the FY25 margin is expected to be meaningfully better than FY24.

Zee aspires to deliver industry-leading 18-20% Ebitda margin. However, it expects it will take six to eight months for these efforts to start showing up in the performance, given the current cost baseline and lead time associated with implementing margin improvement interventions. Regarding the deal termination update with Sony Group, Zee mentioned that its board continues to monitor progress and stated that the claims and the termination fee against the company are not tenable.