- 10 Aug 2023
- ICICI Securities
ZEE ENTERTAINMENT: WASHOUT PERFORMANCE; MERGER CONSUMMATION KEY AHEAD
ZEEL - 135 Change: 1.99 (1.50 %)News: Zee Entertainment reported weak operating performance with ad revenues decline, higher content spends and Zee5 costs impacting margins and one-off charges further exacerbating the bottomline pain. The ad revenues declined 3.6% YoY to Rs 941 crore, with domestic ad decline of ~2.6% YoY. We highlight that ad revenues have declined owing to sports heavy quarter. The overall subscription revenues were up 17.6% YoY to Rs 907 crore. EBITDA came in at Rs 155 crore, decline of 42% YoY basis, with margins at 7.8% (down 675 bps YoY), owing to high content cost. Loss was at Rs 53.4 crore.
Views: The performance was weak on all fronts. Going ahead, market share recovery Marathi/Tamil along with flagship Hindi channels (important for ad growth) where relative performance has been muted, will be the key monitorable. Likely merger consummation, remain key triggers (NCLT is likely to pronounce merger judgement today).
Impact: Negative