ZEELNSEQ4 FY'25May 16, 2025

Zee Entertainment Enterprises Limited

6,215words

82turns

11analyst exchanges

0executives

Key numbers — 36 extracted

rs,

e witnessed a dip in advertising revenue growth and the aberration in subscription revenue numbers, but we remain hopeful of regaining the growth through targeted interventions going forward.

11%

the year, especially for general entertainment. As a result, our FY'25 ad revenues were down by 11%. During the quarter, it declined Y-o-Y due to continued slowdown in the macro advertising environ

on revenue have paved the way for growth during the year. And FY'25 subscription revenue is up by 7%. During Q4 FY'25, subscription revenue remained flat Q-o-Q due to a slowdown in the linear subscr

27 billion

rspective, the linear industry landscape remains in a healthy range with weekly impressions above 27 billion and weekly reach above 740 million. On the linear business front, we continue to be India's str

740 million

cape remains in a healthy range with weekly impressions above 27 billion and weekly reach above 740 million. On the linear business front, we continue to be India's strong #2 TV entertainment network. Our

16.8%

ontinue to be India's strong #2 TV entertainment network. Our viewership share during FY'25 was 16.8%. Encouragingly, our efforts to regain viewership share of Zee Marathi have shown some uptick duri

20 basis point

ee Marathi have shown some uptick during the year. In Q4 FY'25, our viewership share dropped by 20 basis points Y-o-Y due to the busy sports calendar, which was absent during the same period in the last year.

INR 5.6 billion

a movie Viduthalai Part 2 in March '25. Further, during the year, ZEE5 EBITDA loss has reduced by INR 5.6 billion to INR 5.5 billion from INR 11.1 billion in FY'24. That is about 50% reduction in the EBITDA loss

INR 5.5 billion

Part 2 in March '25. Further, during the year, ZEE5 EBITDA loss has reduced by INR 5.6 billion to INR 5.5 billion from INR 11.1 billion in FY'24. That is about 50% reduction in the EBITDA loss Y-o-Y. This is in

INR 11.1 billion

Further, during the year, ZEE5 EBITDA loss has reduced by INR 5.6 billion to INR 5.5 billion from INR 11.1 billion in FY'24. That is about 50% reduction in the EBITDA loss Y-o-Y. This is in line with our strate

50%

s has reduced by INR 5.6 billion to INR 5.5 billion from INR 11.1 billion in FY'24. That is about 50% reduction in the EBITDA loss Y-o-Y. This is in line with our strategic priorities, and this also

164 million

driven by its new-age music catalogue and rich library with over 18,000 songs and garnering over 164 million subscribers on YouTube and nearly 190 billion total video views during FY'25. Further, in the mus

Guidance — 20 items

Punit Goenka

opening

“We witnessed a dip in advertising revenue growth and the aberration in subscription revenue numbers, but we remain hopeful of regaining the growth through targeted interventions going forward.”

Punit Goenka

opening

“Going forward, we will continue to enhance our offerings to create and deliver quality content to fulfil our consumers' entertainment appetite on every screen.”

Mukund Galgali

opening

“While FY'25 was a challenging year for the industry, broadly driven by weak consumption.”

Mukund Galgali

opening

“As a result, our FY'25 ad revenues were down by 11%.”

Mukund Galgali

opening

“Despite this, going forward, we are continuing to look at ways to maximize ad revenues and will remain cautious in the near term on the pace of our ad revenue growth.”

Mukund Galgali

opening

“And FY'25 subscription revenue is up by 7%.”

Mukund Galgali

opening

“During Q4 FY'25, subscription revenue remained flat Q-o-Q due to a slowdown in the linear subscription, which was partially offset by the increase in digital subscription revenue.”

Mukund Galgali

opening

“Our viewership share during FY'25 was 16.8%.”

Mukund Galgali

opening

“In Q4 FY'25, our viewership share dropped by 20 basis points Y-o-Y due to the busy sports calendar, which was absent during the same period in the last year.”

Mukund Galgali

opening

“On the music business, Zee Music Company continues to be the #2 music channel driven by its new-age music catalogue and rich library with over 18,000 songs and garnering over 164 million subscribers on YouTube and nearly 190 billion total video views during FY'25.”

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Risks & concerns — 15 flagged

Overall, the industry displayed immense resilience during the year by taking cautious steps forward and pivoting strategies to enhance revenue generation across segments.

— Punit Goenka

The year culminated on a softer note with a weak macroeconomic sentiment flowing into the fourth quarter.

— Punit Goenka

While FY'25 was a challenging year for the industry, broadly driven by weak consumption.

— Mukund Galgali

During the quarter, it declined Y-o-Y due to continued slowdown in the macro advertising environment, busy sports calendar and a higher base in Q4 FY'24.

— Mukund Galgali

Despite this, going forward, we are continuing to look at ways to maximize ad revenues and will remain cautious in the near term on the pace of our ad revenue growth.

— Mukund Galgali

The impact of NTO 3.0 implementation and growth in digital subscription revenue have paved the way for growth during the year.

— Mukund Galgali

During Q4 FY'25, subscription revenue remained flat Q-o-Q due to a slowdown in the linear subscription, which was partially offset by the increase in digital subscription revenue.

— Mukund Galgali

Coming now to comment on cost and profitability, the team's efforts towards effective cost management across the businesses has led to a decline of 8% in overall operating costs during the year, resulting in a 390 basis point EBITDA margin improvement to 14.4%.

— Mukund Galgali

Our content inventory continued to decline during the year, driven by optimized acquisition.

— Mukund Galgali

— Punit Goenka

I mean, not putting a number, but at least the decline to stop in F '26?

— Umang Mehta

I know it might be slightly difficult to create at this point in time, but I mean, is it possible to give some kind of color on what is the contribution from overseas territories like U.S.?

— Jinesh Joshi

Are we seeing some impact of this consolidation on slightly higher ad rates or maybe a bit more rationalized content cost?

— Aditya Chandrasekar

Second question is on linear subscription, you mentioned some churn, et cetera, which resulted in sequential decline.

— Abhishek Kumar

So, on your first question on advertising, the market is still under pressure.

— Punit Goenka

Q&A — 11 exchanges

So, we have demonstrated excellent cost control over the past few quarters with the benefits clearly reflected in our margins. However, given the current softness in advertising revenues and my expectation that ad revenues will likely remain ZEE Entertainment Enterprises Limited May 08, 2025 sluggish for a couple of quarters, I believe that any further margin expansion will depend largely on growth in this area. So, with that in mind, I would like to understand your approach to achieving 8% to 10% revenue growth and 18% to 20% margins in FY'26?

Punit Goenka

Mr. Parekh, I think there are two aspects to this. One being our re-entry into the FTA space, which did not exist last year. So, there is a completely new segment of free-to-air where we have re-entered. That should help us to get some part of this achieved. And then also our aspirations as I spoke in my opening remarks about the ‘Mini Series’ and what we intend to do with ZEE5, et cetera, will aid this growth factor that we are looking for. Understood. And secondly, I would like to get an outlook on the movie production and distribution side of the business for the next year. We are looking a

Punit, you mentioned about FTA. Actually, would it be possible to share what was the ad revenue from FTA before you all exited say two years back? ZEE Entertainment Enterprises Limited May 08, 2025

Punit Goenka

Umang, you can look at the drop that we had when we exited in terms of our ad revenue, you'll get an idea, but we don't call out these numbers specific to channels and genres, so it will be difficult for me to call that out on a public call. Okay, do you expect ad revenues to grow this year? I mean, not putting a number, but at least the decline to stop in F '26? I certainly expect, as I said, I am an optimist and I do believe that advertising revenue, if it does not grow significantly, but it will certainly grow in the inflationary number that you have given in a high-single digit kind of sta

Sir, firstly, if I look at FY'25, the EBITDA margin has improved by almost 400 bps. But this is fully driven by moderation in losses of ZEE5, in fact, if I just exclude ZEE5 revenue and EBITDA losses, the margins are actually down from 26 to 23 and ZEE5 ZEE Entertainment Enterprises Limited May 08, 2025 revenue growth here is just 6% for this year. So, going forward, would it imply that improvement you are targeting 18% to 20% by exit of FY'26, this would come at the cost of growth in ZEE5? And follow-up there is, what are the active subscriber numbers of ZEE5 and how do they compare with let'

Punit Goenka

So, Sameer, as I said just earlier, that there is no more room for cost cutting, for expansion in the EBITDA margin. Anything that has to come now has to come from revenue growth and part of the revenue growth, even in FY'25 has come from the subscription revenue growth that we have seen. So, from that perspective, please don't expect any more cost cutting to be there on any vertical. We are pretty much at our optimal level of cost rationalization and workings. Sorry, what was the second question? Active subscriber count in ZEE5 right now? We don't generally give that number, but we are in the

Yes. Sir, my question is on the other expense run rate of this quarter. So, if I look at the number, it is at about INR 87 crores. And historically, the run rate has been in the band of about the INR 130 crores to INR 150 crores. So just wanted to understand whether there is an element of one of which you would want to call out.

Mukund Galgali

So Jinesh, in respect of the other expenses, there has been certain recoveries of bad debts, so which have been provisions made earlier, which have been reversed, which are no longer required, which has resulted into this reduced other expenses line item. Can you call out the number? Is it possible? Mahesh Pratap Singh: We're not calling out number, Jinesh, but this is just a reversal, which you typically have as you close the quarter when you run some provisions based on debtors and then that kind of stuff. So, it's not something material. We're not calling it off. You could go back and look

Yes, just a quick question, more of a top down one. Post the JioStar merger, just wanted to understand what you are seeing on the ground in terms of ad rates and in terms of content costs. Are we seeing some impact of this consolidation on slightly higher ad rates or maybe a bit more rationalized content cost? Maybe not immediately, but kind of what are you looking at over the next 2-3 quarters as this consolidation kind of get absorbed and settled in? Just wanted to understand how we should think about overall kind of sector synergies post this consolidation.

Punit Goenka

I think on the first part, on the advertising front, it’s still very early days, Aditya. But I do expect that eventually it will have a positive impact on the overall industry. So, let's hope, keep our fingers crossed for the best. And as I said in my opening remarks, I'm an optimist, so I will expect this also to benefit us. We are already seeing a lot of benefit flowing in on the acquisition of content, probably not on the production yet, because production, as you know, is already a commoditized business that we operate at with multiple suppliers. But on acquisition of whether it is on film

Sir, I just wanted to zoom in a bit on the Zee Music. So, what has been the growth for the music segment for the entire FY'25? That's point one. And second follow- up to that is what is the capex we are planning to do in acquiring new content.

Punit Goenka

So, I'll take the second one which is what I've stated publicly in the past as well. Whatever capex we incur for acquisition of content is on the basis of what we run through our P&L. So, if we run INR 100 through our P&L, then INR 100 is available to us for newer acquisitions. On the first part, Vikas, you want to take that? So, in terms of the growth overall on the music segment, we have seen a growth kind of tapering in single digits, the main reason being some of the homegrown streaming platforms have shut down, or they have slowed down. But if you strip them out of the equation and you se

I think I had already taken that some time back that counting 2025, we were looking at a 3-year timeline in sort of breakeven. Given the softness in the market, ZEE Entertainment Enterprises Limited May 08, 2025 it may shift a little bit up or down, but it's not going to be significantly different from where we had and if there is any significant change to that we will, of course, come back to you and give you enough adequate time and guide you on that. Pankaj Mehendiratta: Understood. And Punit, any thoughts about adding a couple of more disclosures on the OTT side?

Punit Goenka

We are already considering that, and you will see that in the presentation that we will be uploading very soon. Pankaj Mehendiratta: Sure, that's helpful. And the last question and while we appreciate that the focus is now on growth and revenues going ahead. So, when you break it down into both your advertisement and subscription, so what levers does management have in place, let's say barring the macro uncertainty, FMCG wants to deliver or not, a busy cricketing calendar season and all. So, what sort of growth levers do you perceive that would lead to let's say an 8%, 10% sort of continued gr

First off, any change in our guidance that we have provided earlier, because I didn't find that in the presentation, 18% to 20% EBITDA margin next year, I mean, any specific. I mean, are we still sticking to that guidance, or is there any change in the timeline?

Punit Goenka

Yes, Abhishek, we are sticking to that same guidance. All right. Okay. So, thanks for the clarification. Second question is on linear subscription, you mentioned some churn, et cetera, which resulted in sequential decline. How are we seeing the market evolving? Are instances of cord cutting continuing? Is any stability in the number of pay TV households? And also, the appetite for the market to absorb further price hikes from there. ZEE Entertainment Enterprises Limited May 08, 2025 So, the price hikes, if you look at historically have been in single digits itself. The price hikes have not bee

And first of all, congratulations on cutting losses for ZEE5. So, just wanted clarification on revenue and profitability for ZEE5. So, if I understood correctly, what you meant to say in the answer in the previous questions was...

Punit Goenka

We could not understand. So wanted one clarification regarding revenue growth and profitability for ZEE5. So if I understood correctly what you answered in one of your previous questions was the revenue growth that we see in ZEE5 this quarter was also driven by syndication revenue, which is one of the nature and that resulted in a stronger profitability or a better loss ratio, which might not be steady state going forward. Is that understanding correct, sir? Mahesh Pratap Singh: Yes. That's partly correct. So just to be clear, even if you would have taken syndication out, you would have still

As we have seen in past 2 quarters that our advertising revenue declined. So, what do you foresee in the coming 2 quarters might be our advertising revenue will take off suit? And my second question is related to any like this is apart from Q4, but considering the whole year for FY'25, there was some case that our competition in the market is again streaming on and our prices in the market has also gone very down. So, is there any case that a promoter is looking to increase the stakes?

Punit Goenka

So, on your first question on advertising, the market is still under pressure. Very difficult for me to project when the market will start bouncing back. But we do expect that the bounce-back will start very soon, post the cricket calendar end for the entertainment network. The second part, you mean it's about the pricing and promoter wanting to increase stake? Yes. And see, we have a very competitive advantage as compared to the overall market. However, I mean, like it impacts the prices if the stock goes down, right? Any which case, however, it is not the true reality. But if that is the cas

Just on ZEE5, if you can elaborate on what change did you all do for the regional market and how salient are the kind of genre for ZEE5, any color you can give?

Punit Goenka

So, we've had a strategic shift in terms of our pricing for the language markets. Earlier we were selling only one pack, which was all you can eat across languages. And through our own research, we realized that the consumer feels that because their consumption is largely restricted to 1 or 2 languages, they are being cheated in terms of what we are charging them. And therefore, we have redesigned the entire pricing strategy, which was launched in December. In December. So, the results are visible in this quarter. The results are already visible as Mukund said. And yes, so that's what we inten

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Speaking time

Punit Goenka

Moderator

Umang Mehta

Mukund Galgali

Sameer Gupta

Vikas Somani

Jinesh Joshi

Kavish Parekh

Abhishek Kumar

Navid Virani

Opening remarks

Amit Singh

Thank you, Yashasree. Hi, everyone. Welcome to our Q4 FY'25 earnings discussion. We have with us today our CEO, Mr. Punit Goenka, along with 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 question and answers. Before we get started, I would like to remind everyone that some of the statements made or discussed on today's conference call 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 to Mr. Goenka, thank you.

Punit Goenka

Thank you, Amit. Good evening, everyone. Thank you for joining us today to discuss the company's performance during the fourth and final quarter of the financial year 2024-2025. The fiscal proved to be a mixed bag for the industry at large. While I will share the macro level insights into the company's performance during the year, Mukund will take you through the operational metrics of the quarterly performance. Let me begin by speaking about the industry performance during the financial year. Overall, the industry displayed immense resilience during the year by taking cautious steps forward and pivoting strategies to enhance revenue generation across segments. The key steps taken by companies including the channels pricing ZEE Entertainment Enterprises Limited May 08, 2025 revision, resulted in marginal subscription revenue recovery, contributing towards overall revenue growth. Largely, the focus remains on leveraging the unique levers across businesses to drive growth. Speaking about

Mukund Galgali

Thank you, Punit. Good evening, everyone, and great to connect with all of you. I will briefly touch upon some of the key financial highlights of these results. While FY'25 was a challenging year for the industry, broadly driven by weak consumption. Despite this, our profitability has improved during the year, driven by various initiatives taken by the company. The linear ad spending environment continues to remain soft during the year, especially for general entertainment. As a result, our FY'25 ad revenues were down by 11%. During the quarter, it declined Y-o-Y due to continued slowdown in the macro advertising environment, busy sports calendar and a higher base in Q4 FY'24. Despite this, going forward, we are continuing to look at ways to maximize ad revenues and will remain cautious in the near term on the pace of our ad revenue growth. We are also coming up with new strategies such as re-entering into FTA space, new genres, and markets to drive our ad revenue by further capitalizi

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