Zee Entertainment profit falls 40% despite revenue growth driven by FIFA tournament
Key Facts
Revenue growth was driven mainly by subscriptions, while higher spending weighed on profitability. Earnings before interest, depreciation and taxes came to 108.4 crore rupees, down 41.6% from the year-earlier period. Core profit margin also fell to 3.2% from 7.4% a year earlier, Reuters reported. The results show a widening gap between the expansion of digital operations and the content and promotional costs that accompanied it.
Subscription revenue rose 30% to 1,332.4 crore rupees during the quarter, supported by the 2026 FIFA World Cup and the content slate. The company said the two factors lifted average digital revenue per user and subscriber growth. Subscriptions accounted for 59.9% of operating revenue, compared with 52% in the second quarter of fiscal 2026. This reflects subscriptions’ increased weight in the revenue mix in a period when advertising edged down. However, tournament-related growth coincided with higher spending on programming and promotion.
On the digital side, ZEE5 revenue rose 101% to 626 crore rupees. The digital business posted earnings before interest, taxes, depreciation and amortisation of 42 crore rupees, compared with a loss of 31 crore rupees in the year-earlier period. By contrast, advertising revenue fell to 803 crore rupees from 806.3 crore rupees. The company said domestic advertising revenue remained stable, supported by the World Cup and prominent programmes such as “Sa Re Ga Ma Pa,” as well as new launches. But stable domestic advertising did not prevent a slight year-on-year decline in overall advertising revenue.
Total expenses rose 18% to 2,154 crore rupees, while advertising and promotion expenses increased 55% to 571 crore rupees. The company attributed higher programming and advertising expenses to the World Cup, an expanded content offering and investment in other initiatives. Reuters said total expenses rose 16%, while core profit margin fell to 3.2% from 7.4% a year earlier. The difference in reported expense growth reflects differing figures cited by the sources, while both reports point to margin contraction. Revenue from other sales and subscriptions, which includes the distribution business, also fell 36% to 89.2 crore rupees.
Zee’s traditional television business is facing pressure as advertisers shift spending to digital platforms, Reuters reported. That puts weak advertising growth alongside high spending on content and promotion, even as subscriptions and digital services expand. Elara Capital analysts said in a note before the results were announced that higher advertising and promotion spending could weigh on core profit margins. The company’s shares closed at 66.40 rupees on October 30, down 5.83% during the session. The company said the upcoming festive season should support advertising revenue growth, making the performance of that revenue stream a focus in the next quarter.