Zee Entertainment Enterprises Limited

Key Operating and Financial Performance Highlights

Digital Business (ZEE5):

  • Achieved operational breakeven and delivered its first full year of positive EBITDA in FY26, compared to a loss of INR 5,480 million in FY25.
  • Q4 FY26 digital revenue grew 71% year-on-year (YoY) to INR 4,700 million, marking the highest-ever quarterly revenue for the segment.
  • Full-year FY26 digital revenue grew 53% YoY.
  • The platform released over 120 shows and movies in FY26, including 34 originals, driven by a 7-language strategy.

Broadcast Business:

  • The overall linear TV network share was 17.4% in Q4 FY26, an increase of 80 basis points YoY. The company exited March 2026 with a network share exceeding 18%.
  • The flagship Hindi GEC channel, Zee TV, reported a robust GRP growth of 40% and claimed leadership in prime-time slots for 26 consecutive weeks.
  • The company's monthly unique reach crossed 800 million across all platforms.
  • Weekly impressions for linear TV remained stable at above 28 billion, with a weekly reach exceeding 740 million.

Advertising Revenue:

  • Overall advertising revenues declined 4% YoY in Q4 FY26.
  • The decline was attributed to a severe impact in March 2026 due to the Middle East conflict, which caused advertisers to hold back spends.
  • Management stated that adjusted for the March impact, advertising revenues would have witnessed low single-digit growth in Q4.

Subscription Revenue:

  • Subscription revenues registered a 4% YoY growth in Q4, primarily driven by the digital business.

Other Businesses:

  • Music Business: Garnered over 217 billion total video views with more than 176 million subscribers on YouTube. The business is supported by a library of over 20,000 songs and remains profitable.
  • Studios Business: Released 13 movies in Q4 (7 Hindi, 6 other languages; 9 own productions, 4 distribution deals). The syndication vertical delivered promising results, but a muted performance in the studio business led to a 47% YoY decline in 'other sales and services' revenue for the quarter.

Strategic Investments and Initiatives

The Board approved two strategic investments during the quarter:

1. INR 20 crores in CORE Private Limited (Culture of Real Experiences) to drive the company's Live events business.

2. INR 116 crores in Phantom Digital Effects Limited, a listed global VFX company, to enhance capabilities in the Animation, Visual Effects, Gaming, and Comic (AVGC) segment.

The company also continues to develop its Micro-Drama app, Bullet, which gamifies the viewing experience with short-form content. The short-form content market in India is estimated at INR 3,000-3,500 crores, while the organized live events business is estimated at close to INR 50,000 crores.

Profitability and Financial Metrics

One-Time Charge: The company recognized an additional impairment and change in movie rights amortization estimates totaling INR 4,084 million in Q4. The amortization pattern for movie inventory was revised to be more front-ended, now recognizing 50% of the cost in the first two years and the balance over the next three years, aligning with digital viewership trends.

Cost Structure:

  • Overall operating costs remained nearly flat YoY in Q4.
  • This was driven by lower programming costs (due to the shift of ILT20 to Q3) and lower production costs in the studio business, partly offset by increased marketing spend for the digital business and the hosting of the Zee Cine Awards.
  • Employee costs were down 16% YoY in Q4 and 9% for the full year, attributed to manpower optimization and role rationalization over the past year.

Adjusted EBITDA Margin: Stood at 6.9% for Q4 FY26. Management indicated that excluding the one-off legal expenses and the impact of lower advertising revenue from the Middle East conflict, margins would have been similar to Q3 FY26.

Balance Sheet & Liquidity:

  • Cash and treasury investments as of March 31, 2026, stood at a healthy INR 27.6 billion.
  • This comprised a cash balance of INR 7.5 billion, fixed deposits and other treasury investments of INR 7.8 billion, and mutual fund investments of INR 12.3 billion.
  • Content inventory advances and deposits were at INR 67.6 billion, down by INR 2.8 billion YoY.

Management Commentary and Outlook

Management acknowledged that the uncertain geopolitical environment and macroeconomic headwinds, particularly the ongoing Middle East conflict, disrupted consumer sentiment and advertiser spending in Q4. Advertisers are expected to maintain a cautious approach in the near term.

Despite these challenges, the company stated it remains resilient and well-poised, focusing on the strategic initiatives implemented in FY26 across content, omnichannel approach, and new investments. The focus will remain on driving revenue growth while maintaining cost prudence to aid operating leverage, profitability improvement, and cash generation once the macroeconomic environment stabilizes.