Zee Entertainment shares opened lower on Tuesday, trading at Rs 92.10, down 2.46% or Rs 2.32, after the company released its first‑quarter results a day earlier.
The company announced a sharp decline in its first‑quarter net profit, which fell 47% year‑on‑year to Rs 76 crore from Rs 144 crore in the same period last year.
Despite the profit slump, operating revenue rose 4.5% to Rs 1,908 crore, up from Rs 1,825 crore a year ago, driven largely by subscription growth.
Advertising revenue, however, slipped 11.5% to Rs 671 crore from Rs 759 crore, reflecting a weak ad environment and higher costs.
Subscription revenue increased 15.8% to Rs 1,137 crore, showing that the company’s digital push is gaining traction.
At the operating level, EBITDA fell 65.4% to Rs 79 crore, giving the firm a margin of 4.1%. The drop is attributed to higher programming costs after acquiring FIFA rights and increased promotional spend.
The firm highlighted the impact of the FIFA deal, noting that higher content costs and ad spend for new sports channels have pressured margins.
Zee5, the company’s streaming arm, emerged as a bright spot, with revenue up 57.6% to Rs 457 crore and EBITDA of Rs 4.4 crore in Q1FY27.
PL Capital upgraded Zee Entertainment to ‘Buy’ with a target price of Rs 116, citing expected margin recovery in the second half of FY27 and stronger digital traction.
Motilal Oswal maintained a ‘Neutral’ rating and a target of Rs 100, pointing out that while subscription growth is solid, linear TV profitability remains weak.
Elara Capital kept a ‘Sell’ rating and a target of Rs 80, arguing that advertising revenue decline and margin compression signal structural weaknesses.
All three brokers expect the FIFA subscription packs to boost revenue in Q2, but they differ on the extent and timing of the uplift.
Overall, analysts remain cautious, noting that a recovering ad market and continued digital growth will be key to turning the company’s fortunes around in the coming year.