Zee Entertainment Enterprises Ltd (ZEEL) Managing Director Punit Goenka on Tuesday said that as the leader of the company and a member of its founding family, he “certainly wanted the merger with Sony”.

Punit Goenkawas addressing shareholders during the earnings call. He said that

“As you all are aware that the company’sproposed mergerwas terminated bySonythrough a communication received on January 22, 2024. The same was reviewed by our Board and appropriate steps have been taken in consultation with legal experts that are in the best interest of our stakeholders.

“We have even approached the NCLT to seek direction on the implementation of the scheme. As a member of the founding family of ZEE and as a leader of this organisation, I certainly wanted the merger to be implemented. Zee even took several steps towards the closure of profitable businesses in the domestic and international markets. I personally offered several proposals to Sony to address their demands but unfortunately, they remained unaccepted. Since the matter is sub judice, I would not like to say more and let the law take its own course,” he said while releasing the company’s Q3 financial results.

During the call, he assured shareholders that he has chalked out a plan to bring back the company’s margins and drive growth for the future.

Goenka also mentioned that the advertisement revenues were impacted due to weak consumption patterns in some markets.

“I am a firm believer in learning from the past, living in the present and believing in the future. Therefore, I will talk about the potential of the company to deliver a stronger growth trajectory going forward.

“Over the last few years, the overall macroeconomic environment remained soft due to weak consumption patterns in some markets. As a result, the advertisement revenues were impacted. Subscription revenue growth also remained impacted due to theNTO-related issues. The headwinds are certainly beginning to ease,” he said.

“Zee continues to have strong business fundamentals. The company’s intrinsic value remains intact and I have chalked out a firm and structured plan to bring back our margins to industry levels and drive growth for the future.”

Goenka explained his three-pronged approach for Zee’s robust future. “The first is frugality. Over the last three decades, Zee has been recognised for its fiscal prudence across the industry, and going forward, there will be a sharper emphasis on frugality, with a crystal-clear focus on quality and output.

“Across verticals, including technology, content and marketing, we are implementing steps to optimise spending and enhance the return on investments,” Goenka said, adding that a sound recalibration of the OTT cost structure will be an integral part of this process.

The second is optimisation, he said. “Our aim is to enhance our productivity by implementing a structured resource optimisation drive. This also means enhancing the level of synergies and reducing overlaps between businesses.”

“On the revenue side, we will take steps to increase the value delivery to our advertisers; apart from exploring alternate content monetization avenues. This also includes leveraging the strength and reach of our platforms,” he said.

The third approach he mentioned was maintaining a sharp focus on quality content by streamlining the content creation process for quality output without compromising on the delivery.

“Quality over quantity will be our mantra going forward. For example, it may result in creation of a relatively lesser number of originals if required; but we will ensure that every piece of content we create is superior in quality and captivating for our audiences,” Goenka said.

During the call, he assured his investors/shareholders that a gradual recovery in margins is expected to reflect from the second half of FY25.

“We certainly expect FY25 margins to be meaningfully better than FY24. My focus is on enhancing the performance of the Company to achieve the targeted recovery, and we remain committed towards further fortifying our portfolio and competing effectively in the industry,” he said.

“A steady state of aspiration will be to target 8 to 10% CAGR revenue growth, with digital business growing at a much faster pace,” he further said.

As per media reports, Zee has said in its financial statements that it has "strong grounds" to counter Star India's claims in theICC TV rightsmatter. Zee has sought a Rs 69-crore refund as part of the agreement, media reports said.