ZEELNSEJanuary 30, 2025

Zee Entertainment Enterprises Limited

6,568words

75turns

7analyst exchanges

0executives

Key numbers — 35 extracted

rs,

inister, to revive the consumption cycle in order to spur the industry. On the back of these factors, we remain optimistic about a gradual recovery in the new fiscal, that will enable us to capitalize

other language markets are still holding relatively better. As a result, our Ad revenues were up 4% QoQ and still down 8% YoY. We are continuing to look at ways to maximise Ad revenues in this envi

s are still holding relatively better. As a result, our Ad revenues were up 4% QoQ and still down 8% YoY. We are continuing to look at ways to maximise Ad revenues in this environment and will rem

8.2%

ealthy YoY growth in subscription revenues and our nine-months FY’25 subscription revenues are up 8.2%. We have also published, as Punit alluded, the new channel tariff which will help us to continue

1.4%

industry landscape remains healthy, and the overall industry wide TV viewership has increased by 1.4%. Further, we continue to be a strong #2 entertainment network in India, and we have gained 40 bps

40 bps

y 1.4%. Further, we continue to be a strong #2 entertainment network in India, and we have gained 40 bps share to 16.9% compared to the same period last year. And as Punit mentioned, again, Zee Marathi

16.9%

we continue to be a strong #2 entertainment network in India, and we have gained 40 bps share to 16.9% compared to the same period last year. And as Punit mentioned, again, Zee Marathi has shown a c

Rs 22.6

ide, ZEE5 has further narrowed its operating losses in this quarter. It’s EBITDA loss is lower by Rs 22.6 Cr QoQ & Rs 107.8 Cr YoY basis. While cost structure and profitability has been a key focus area f

Rs 107.8

ther narrowed its operating losses in this quarter. It’s EBITDA loss is lower by Rs 22.6 Cr QoQ & Rs 107.8 Cr YoY basis. While cost structure and profitability has been a key focus area for us in this busi

43%

ZEE Entertainment Enterprises Limited January 23, 2025 Services” revenues have shown a declined 43% YoY due to lower syndication and leaner movie lineup. On Music business, Zee Music Company (ZMC

10%

Now moving to costs and Profitability of the company, on an overall operating cost declined by 10% YoY due to overall efficient execution, lower programming and technology cost and continued cost

10 bps

sing environment, has helped us maintain our momentum on profitability with our EBITDA margins up 10 bps QoQ, and up 590 bps YoY. During this quarter, we have also made a provision of Rs 809 mn based on

Guidance — 13 items

Punit Goenka

opening

“However, improving consumption is expected to drive a positive momentum for recovery going forward.”

Punit Goenka

opening

“We expect subscription revenues to continue growing after a couple of quarters of implementation.”

Punit Goenka

opening

“That said, we have key releases lined up during the fourth quarter, and these will reflect in our performance going forward.”

Mukund Galgali

opening

“Going forward, we will continue to accelerate our ESG agenda.”

Abneesh Roy

“ZEE Entertainment Enterprises Limited January 23, 2025 And you did mention that now the margin improvement will be more a function of revenue acceleration or revenue growth coming back, in terms of at least advertising, subscription you are doing well.”

Punit Goenka

“I think maybe next quarter we can talk a little more in depth on that.”

Abhishek Kumar

“So, I was wondering can that be construed as a formal dividend policy or a formal policy will be rolled out sometime in the near future?”

Abhishek Kumar

“So, it already states that we will be paying out 25% of consolidated value, okay.”

Punit Goenka

“So, Abhishek, we had recommended to the Board at the beginning of this financial year itself that by FY‘26 we will be targeting to get to 18% to 20% margin.”

Chirag Maroo

“Just wanted to know that will it be helping us to reduce our future effective tax rate (ETR) going forward, which was around 30% in the last year?”

Advertisement

Risks & concerns — 12 flagged

Q3 FY’25 was a soft quarter for advertising growth, wherein broad consumption slowdown outweighed festive season pickup.

— Mukund Galgali

From our vantage point, the impact of this consumption weakness and resultant FMCG Ad spend slowdown has been more pronounced in the Urban areas and in the Hindi heartland, while South cluster or other language markets are still holding relatively better.

— Mukund Galgali

We are continuing to look at ways to maximise Ad revenues in this environment and will remain cautious in the near term on the pace of our Ad revenue growth.

— Mukund Galgali

Our content inventory has continued to decline driven by optimised acquisition.

— Mukund Galgali

You did mention that music rights, you want to be a bit cautious, given the landscape change the music rights are going more expensive, so wanted to understand what is the landscape change, is it that the foreign players are entering ZEE Entertainment Enterprises Limited January 23, 2025 the Indian music rights industry more aggressively?

— Abneesh Roy

So, the risk reward ratio is evaluated on a regular basis on a per content basis as well.

— Punit Goenka

Of course, we are going to be even more cautious on the Hindi movie segment that you talked about.

— Punit Goenka

So, my question on advertising is essentially two, one is, FMCG, clearly rural is something more recovery will keep happening and urban clearly two more quarters of slowdown is definitely there in terms of FMCG.

— Abneesh Roy

Sir on the advertising two quick follow up, one is, international, there is a slowdown.

— Abneesh Roy

If you look at it in the international markets, well, yes, you may consider that the slowdown is happening in certain markets, etc.

— Punit Goenka

No more directionally, are you seeing some early signs that competitive pressure is reducing?

— Abneesh Roy

On the growth part, it's difficult to say right now given the macroeconomic situation, but quarter-on-quarter we will give you more color.

— Punit Goenka

Q&A — 7 exchanges

Congrats on the margin expansion. My first question is on the movie production business and music rights business, choosing between the two for you as a Company. So, movie production business in FY‘25 has been extremely challenging in terms of Hindi movies. Most have not done well; few sporadic successes are there only. And your latest movie in Q4 also till now has seen very muted response. So, why not reduce the focus on a riskier part of the business and flow that towards say music rights business? You did mention that music rights, you want to be a bit cautious, given the landscape change t

Punit Goenka

Yes, Abneesh. Yes, I think as Mukund mentioned in his opening remarks, we do evaluate the mix between movies and music based on what the return profiles are going to be. So, the risk reward ratio is evaluated on a regular basis on a per content basis as well. So, we do it, but we do have to also look at the fact that the movies business also works as a feeder business for us, and our basic requirement of what we require internally has to be met. On the music part, yes, as we stated that the music rights are getting a bit aggressive in the market, but from what I see, it's largely from the dome

Thank you for the opportunity. My question is on ZEE5. You mentioned that you have seen growth in subscribers. And you also mentioned that the renewal of a B2B deal led to a lower growth. I believe you have taken price hike, right, in at least double digits. Would it be possible to split the growth in these three parts, to make us understand better?

Punit Goenka

Umang, we have not taken any price hike in this quarter. No, I mean, on YoY basis your plans are about Rs. 100 more expensive, right, versus earlier, is that correct? YoY, yes, I think you are right. Yes. So, there's some bit of that blended which flows through, Umang. But also keep in mind that year-on-year when you are comparing your mix of customer profile is also very different from B2C to B2B. So, the price rise which you are talking about plays out in B2C part of it, but B2B is more a one-on-one negotiated conversation and so on. So, large part of what you are seeing, the 8% growth could

Sir, my question is on the RIO copy that we have filed recently, it appears that in some markets like Hindi, Marathi, Bangla, etc., the bookie prizes have been revised downwards. So, just wanted to know the reason behind it, given the fact that in some of these genres like for example Hindi we launched about three new shows in the last quarter, and even in this quarter’s PPT we have some new content come up. Even in Marathi and Bangla recent quarter PPT, in fact , we have some new content coming up. So, basically, this indicates that the monetization potential for these genres is good going ah

Punit Goenka

I am not sure where you are getting that the price has been revised downwards. I was just comparing the RIO copy that we filed recently with the earlier version. Earlier version as in the one we filed last year? Right. Okay, then it could potentially be, a function of penetration versus pricing. And if by lowering the price we get better penetration, that could be the only reason that would have happened. But I would recommend that Mahesh take it up offline with you, because that entire data of that granularity is not available in this room as we speak. Yes. And Jinesh, as you look at this, we

First question is on, in November the Board had outlined two, three valuation criteria. One of them was a dividend payout of 25% of consolidated PAT. So, I was wondering can that be construed as a formal dividend policy or a formal policy will be rolled out sometime in the near future?

Mukund Galgali

So, Abhishek, the formal dividend policy is already available on our website, and this is the reiteration of our commitment to maintain that. So, it already states that we will be paying out 25% of consolidated value, okay. ZEE Entertainment Enterprises Limited January 23, 2025 And we had skipped dividend in previous year, and this reaffirms our commitment to continue that path, so that's really where this starts. The other criteria were around growth in margin for the next four quarters. Will you be able to give a more detail around that? What would be the number that the Board has set for th

Sir, I have one book-keeping question. I can see that we have almost Rs. 900+ crores, DTA (Deferred tax asset) on books. Just wanted to know that will it be helping us to reduce our future effective tax rate (ETR) going forward, which was around 30% in the last year?

Mukund Galgali

Chirag, so we are constantly monitoring our ETR. And as you can see, during this quarter also it has come down. And we see potential in utilizing the deferred tax assets to keep our ETR lower, yes. ZEE Entertainment Enterprises Limited January 23, 2025 What can be the expected ETR for FY’25? We cannot give you a number, I mean we can connect offline, but we cannot really disclose any number right now. Sir second question, I just wanted to understand, as you say that the ad consumption would pick up for FMCG and the ad spends will flow through. Just wanted to know, is there any change in mix of

So, my first question is, sir, can you share the status on the arbitration case filed by Star against us in the previous quarter? And my second question will be a book- keeping question, so there has been a reduction in our depreciation this quarter, so can you give us any guidance on the trajectory going forward on depreciation?

Vikas Somani

On the ICC arbitration, the proceedings have begun. Both the sides have made their filings with the court and the arbitrator. But it's still initial days, it's a relatively long drawn process. So, we will keep you updated as and when we progress on that. And I will take the second one on the depreciation, Akshat, it's an organic reduction. I mean, there is no major shift in our asset profile or the depreciation rate. So, it would be around the same levels. ZEE Entertainment Enterprises Limited January 23, 2025

Thanks, Sejal. Thank you, everyone. Thanks for joining us today. We hope the conversation was helpful for you to get a better perspective on numbers and address all your questions. If you have any follow-up or questions as you look at numbers even deeply, please feel free to reach out to us. And we look forward to speaking with you soon. Thanks.

Management

Advertisement

Speaking time

Punit Goenka

Mukund Galgali

Mahesh Pratap Singh

Moderator

Jinesh Joshi

Chirag Maroo

Abneesh Roy

Umang Mehta

Abhishek Kumar

Vikas Somani

Opening remarks

Mahesh Pratap Singh

Thank you, Sejal. Hi, everyone. And welcome to our Q3 FY‘25 earnings discussion. We have with us today our CEO – Mr. Punit Goenka, along with the Senior Management Team. We will start with opening remarks from Mr. Goenka, followed by commentary on Operating and Financial Performance by Mr. Mukund Galgali – Deputy CEO and CFO. We will subsequently open the floor for questions and answer. Before we get started, I would like to remind everyone on the call that some of the statements made or discussed today will be forward-looking in nature and must be viewed in conjunction with the risks and uncertainties we face. The Company does not undertake to update any of these forward-looking statements publicly. With that, I will now hand the call over to Mr. Goenka.

Punit Goenka

Thank you Mahesh. Good evening, everyone! Warm wishes to all of you for a wonderful 2025. Thank you for joining us this evening to discuss the Company’s performance in the third quarter of the financial year 2024-25. Today, I would like to share some macro- level insights about the Company’s performance during the quarter and the trends witnessed by the industry. Post this, Mukund will take you through the granular details of our performance and the key numbers. As you would have noted, the Company’s focus during the first three quarters of this fiscal was around strengthening the fundamentals of the business, and pivoting strategies to enhance the performance and profitability levels. We have implemented several action-oriented steps that have translated in our year-on-year margin ZEE Entertainment Enterprises Limited January 23, 2025 expansion. The fiscal prudence exercised across the Company has served us well, enabling us to maintain a firm grip on the margin profile and balance sh

Mukund Galgali

Thank you, Punit. Good evening, everyone. And it's great to connect with all of you. I will briefly touch upon some of the Key Financial Highlights during the quarter. We are pleased with the continued progress in the business as reflected in healthy profitability amidst the challenging macro environment. Q3 FY’25 was a soft quarter for advertising growth, wherein broad consumption slowdown outweighed festive season pickup. While we did see some pick up in October closer to Diwali, the momentum quickly cooled down in November, December. From our vantage point, the impact of this consumption weakness and resultant FMCG Ad spend slowdown has been more pronounced in the Urban areas and in the Hindi heartland, while South cluster or other language markets are still holding relatively better. As a result, our Ad revenues were up 4% QoQ and still down 8% YoY. We are continuing to look at ways to maximise Ad revenues in this environment and will remain cautious in the near term on the pace of

Advertisement

← All transcripts ZEEL stock page →

Zee Entertainment Enterprises Limited

Market Movers