Zee Entertainment CEO Punit Goenka highlighted that advertiser segments beyond FMCG are beginning to contribute, providing greater diversification to the company’s revenue mix
Zee Entertainment Enterprises Ltd (ZEEL) is showing early signs of a turnaround in advertising revenues, despite continued softness in FMCG spends, CEO Punit Goenka said during the company’s Q3 earnings call.
“Our business is largely dependent on FMCG. Any improvement in that sector has an immediate impact,” Goenka noted, adding that while year-on-year ad revenues remain under pressure, the company saw a “significant improvement” quarter-on-quarter. Advertising revenues rose 6% sequentially in Q3, though they were down 9% YoY, reflecting a slow but steady recovery.
Goenka highlighted that advertiser segments beyond FMCG are beginning to contribute, helping diversify the revenue mix. He emphasized that ad growth will align with the margin structure, noting that ZEEL is already operating at a highly optimized cost base. “While we are optimistic about advertising growth in the coming quarters, it will go hand in hand with margins because our cost structure is already lean,” he said.
Management also stressed that headcount and personnel costs remain among the most competitive in the industry, with ongoing optimization where overlaps between linear and digital operations have made certain roles redundant.
ZEEL’s digital business is also reaching a key milestone, with streaming platform ZEE5 now breaking even. Goenka highlighted sequential growth of around 30% over the last three quarters, calling breakeven a critical part of the company’s growth story.
The company’s linear TV portfolio is also gaining momentum. Q3 saw a 60-basis-point YoY increase in network viewership share to 17.5%. Zee TV posted strong GRP growth, Zee Bangla regained leadership in the East, and in the South, ZEEL emerged as the fastest-growing network with a 17.7% share. Zee Marathi achieved a dominant 33.6% market share, supported by refreshed content, CFO Mukund Galgali said.
Operating costs rose 12% QoQ, mainly due to higher programming expenses linked to the preponement of ILT20 cricket matches and acquisitions of big-ticket titles such as Kantara Chapter 1 and Akhanda 2. Excluding these one-offs, costs would have declined mid-single digits.
ZEEL also confirmed a cautious approach to capital raising, deferring further drawdowns under its FCCB programme until there is full clarity on fund deployment.
On the long-running Star arbitration, management said proceedings have been adjourned to July following confidentiality-bound developments disclosed by Jio, with the verdict expected after the July hearing, though timing remains uncertain.
