Zee on track with healthy growth momentum on margin profile: Punit Goenka

Zee Entertainment Enterprises Ltd is on track with healthy growth momentum on margin profile, according to chief executive and managing director Punit Goenka. 

Speaking during an earnings call on Wednesday, Goenka highlighted that the company, which has reduced its workforce by an estimated 15% as it moves towards a leaner management structure, is benefiting from improved operational performance.

“With a firm grip on costs, we hope to maintain a healthy margin improvement rate. Our focus remains on achieving objectives of frugality, optimization, and quality,” Goenka said. 

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He noted that while there are positive signs in the advertising market, recovery remains slow, particularly in rural areas. Additionally, advertising for general entertainment was impacted by the ongoing general elections and sports events. 

On the subscription front, Goenka expects gradual growth in linear television in the coming quarters, while digital revenue from the video streaming platform ZEE5 remains stable.

Zee reported a profit of ₹125.7 crore for the first quarter of FY25, a significant increase from ₹3.9 crore in the year-ago period. Ebitda for the quarter stood at ₹271.7 crore, with a margin of 12.8%. Operating revenue increased 7.4% year-on-year to ₹2,130.5 crore, though domestic advertising revenue fell 3.6%, hit by the general elections and sports broadcasting.

The company's board has approved a new organizational structure proposed by Goenka, leading to several senior-level departures, including Rahul Johri, president of business; Punit Misra, president of content and international markets; Nitin Mittal, president and group chief technology officer; and Shariq Patel, chief business officer at Zee Studios.

Goenka has taken direct control of the domestic broadcast business and plans to leverage synergies across Zee's core segments, which include broadcast, digital, movies, and music. This restructuring aims to foster cross-functional collaboration and streamline operations.

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This comes after after Sony Group Corp., the parent company of Sony Pictures Networks India, now Culver Max Entertainment, and Bangla Entertainment Pvt. Ltd. terminated their $10-billion merger agreement with Zee on 22 January. Sony has sought $90 million in damages, alleging a breach of conditions by Zee. The merger would have been among the largest in India's media and entertainment sector before it was called off.