Zee Entertainment’s Adjusted Net Profit Down by 7% in June Quarter

Mumbai, July 22, 2025: Zee Entertainment Enterprises Ltd (NSE: ZEEL, BSE: 505537) reported its unaudited financial results for the quarter ended 30 June 2025 (Q1FY26), with consolidated net profit dropping 24% sequentially to ₹1,43.7 crore amid lower operating income and ongoing legal challenges. Adjusted net profit came down year on year by 7%.

The stock closed the day today, 22nd July, down by 6.23% at Rs 133.

Key Financial Highlights

Standalone Performance (₹ in Million)

In Q1FY26, Zee Entertainment’s standalone performance saw its Revenue from Operations at ₹16,839 million, a decline from ₹20,042 million in Q4FY25 and ₹20,007 million in Q1FY25. Total Income followed a similar trend, coming in at ₹17,026 million in Q1FY26, down from ₹20,348 million in Q4FY25 and ₹20,160 million in Q1FY25. Profit Before Tax stood at ₹1,547 million in Q1FY26, lower than ₹2,024 million in Q4FY25 and ₹1,634 million in Q1FY25. Consequently, Net Profit decreased to ₹1,115 million in Q1FY26 from ₹1,555 million in Q4FY25 and ₹1,125 million in Q1FY25.

Basic and Diluted EPS also saw a decline, reporting ₹1.16 in Q1FY26 compared to ₹1.62 in Q4FY25 and ₹1.17 in Q1FY25. For the full fiscal year 2025 (FY25), standalone Revenue from Operations was ₹77,124 million, Total Income was ₹79,042 million, Profit Before Tax was ₹9,060 million, Net Profit was ₹7,013 million, and EPS was ₹7.30.

Consolidated Performance (₹ in Million)

On a consolidated basis, Zee Entertainment’s Revenue from Operations in Q1FY26 was ₹18,248 million, a decrease from ₹21,841 million in Q4FY25 and ₹21,305 million in Q1FY25. Total Income was ₹18,498 million in Q1FY26, down from ₹22,203 million in Q4FY25 and ₹21,495 million in Q1FY25. The consolidated Net Profit from Continuing Operations for Q1FY26 was ₹1,437 million, a decline from ₹1,886 million in Q4FY25 but an increase from ₹1,257 million in Q1FY25.

Total Comprehensive Income in Q1FY26 was ₹1,569 million, compared to ₹1,918 million in Q4FY25 and ₹1,265 million in Q1FY25. Consolidated Basic and Diluted EPS for Q1FY26 was ₹1.50, lower than ₹1.96 in Q4FY25 but higher than ₹1.23 in Q1FY25. For the full FY25, consolidated Revenue from Operations was ₹82,941 million, Total Income was ₹84,175 million, Net Profit from Continuing Operations was ₹6,874 million, Total Comprehensive Income was ₹7,206 million, and EPS was ₹7.08.

QoQ Movement: Operating revenue declined 16.4% on a standalone basis and 16.5% on a consolidated basis quarter-on-quarter. This was primarily attributed to a drop in advertising income and expected seasonality in the content and broadcasting business.

Segment & Expense Overview

• Ad Revenue: Consolidated advertising revenue fell to ₹7,585 million (vs ₹8,375 million in Q4FY25).
• Subscription Income: Held stable at ₹9,817 million.
• Operational Costs: ₹9,710 million in Q1FY26 vs ₹12,819 million in Q4FY25.
• Employee Expenses: Slight dip to ₹2,201 million (vs ₹2,300 million QoQ).
• Exceptional Items: No exceptional items reported in Q1FY26, compared to ₹986 million in FY25, which included DSRA-related recoveries and asset provisioning.

Corporate Announcements

• AGM Scheduled: The company will convene its 43rd Annual General Meeting on September 15, 2025, via video conferencing.
• No New Restructuring Costs: No restructuring or impairment charges were recorded in Q1FY26.

Legal and Regulatory Matters

1. SEBI & MCA Investigation

• The company continues to face scrutiny under SEBI’s PFUTP regulations and a parallel inspection by the Ministry of Corporate Affairs.
• An Independent Investigation Committee (IIC) found no material irregularities. A settlement application filed by Zee has been rejected, but SEBI’s further proceedings remain ongoing.

2. Star India ICC Rights Dispute

• Star (now JioStar) has escalated its damages claim to USD 1,003 million in ongoing LCIA arbitration over ICC broadcasting rights.
• Zee maintains that the termination of the agreement was valid and is defending its counterclaim of USD 8.06 million plus interest. Evidentiary hearings are scheduled for November 2025.

3. GST Dispute

• A ₹1,736 million input tax credit issue under protest is under challenge by Zee through legal recourse.

4. Put Option Legal Win

• The Supreme Court of Mauritius ruled in Zee’s favour, declaring the rescission of the Put Option agreement with Living Entertainment Ltd as valid. This closes a key legacy dispute.

Management Commentary

The Board noted, “The transactions under SEBI and MCA inquiry were part of normal business operations. No adjustments are required in the financials.” On the Star ICC matter, the company stated it has “strong and valid grounds” to defend its position and does not expect a material adverse impact.

What Do These Factors Mean For The Investors?

Zee Entertainment’s Q1FY26 results indicate short-term operational pressure, with a 24% QoQ drop in net profit driven by lower advertising revenue and seasonal weakness. While subscription income remained stable and costs were curtailed, the ongoing SEBI probe and the ₹1,000+ million Star ICC arbitration present regulatory and legal overhangs. However, the company’s legal win in Mauritius, absence of new restructuring charges, and cost optimisation offer some positives. Investors may remain cautious in the near term, but clarity on legal matters and advertising recovery could drive future re-rating.

Share Price Performance

As of 2:50 PM, the shares of Zee Entertainment were trading at ₹135.22, down by 4.67% or 6.62. The steep fall can be attributed to the 24% QoQ decline in its net profit.

What’s Ahead?

Zee remains focused on content monetisation and digital expansion, particularly through its OTT platform, Zee5, which aims for breakeven in FY26. The company is actively rationalising non-core assets like Margo Networks. As part of a strategic expansion initiative, two new subsidiaries – Ibullet Enterprise Ltd and Advance Media Distribution Ltd – were incorporated in June 2025, signalling future growth directions in media distribution and other ventures.

About the Company

Zee Entertainment Enterprises Ltd (ZEEL) is a publicly listed media and entertainment conglomerate, primarily operating in content production and broadcasting. The company’s shares are listed on NSE and BSE under the symbol ZEEL and Scrip Code 505537, respectively.

REF:https://www.bseindia.com/xml-data/corpfiling/AttachLive/40593dff-19b5-4394-a3a1-dc9e37213c3a.pdf

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