Zee Entertainment Eyes Budget 2025 for Growth Revival

Zee Entertainment Enterprises Limited (ZEEL) is optimistic about a recovery in advertising revenue as it looks forward to the Union Budget 2025 to revive the consumption cycle. Despite the festive season, Zee's advertising revenue declined by 8.4% year-on-year (YoY) in Q3 FY25 to ₹940 crore, reflecting continued strain in demand, particularly in the fast-moving consumer goods (FMCG) sector. Domestic advertising revenue fell 10.8% YoY to ₹880 crore, while international ad revenue saw a significant uptick of 50% YoY to ₹60 crore.  

Advertising Revenue Challenges

CEO Punit Goenka, addressing the Q3 earnings call, expressed hope that the Union Budget would introduce measures to stimulate consumption and, in turn, boost advertiser spending. "We are optimistic about a gradual recovery in the new fiscal that will enable us to capitalize on increased spending by advertisers," Goenka said.  

Despite some green shoots early in the quarter, the advertising momentum failed to sustain through November and December. Challenges were particularly evident in the Hindi heartland, where weak FMCG ad spending exacerbated the downturn. However, regional markets in southern India displayed better resilience.  

ZEEL’s Acting CFO Mukund Galgali added that the company is actively exploring opportunities beyond FMCG, such as retail and partnerships in international markets, to diversify its revenue base. The decline in FMCG ad volumes, which dropped 6% YoY according to the TAM AdEx report, underscored the broader industry trend of muted advertising growth.  

Subscription Revenue Gains

While ad revenue faced headwinds, ZEEL’s subscription revenue showed promising growth. The segment increased 6.6% YoY to ₹980 crore, driven by robust performance in linear subscriptions and the streaming platform ZEE5. Domestic subscription revenue grew 8.4% YoY to ₹890 crore, while international subscription revenue was recorded at ₹860 crore. ZEE5 contributed ₹230 crore, up 8.1% YoY, supported by the release of 14 shows and movies in the quarter.  

However, ZEE5’s revenue fell short of expectations due to delays in business-to-business (B2B) deals. Despite this, subscriber growth remained strong, indicating potential for future revenue recovery.  

Restructuring and Exceptional Items 

The company continued its restructuring efforts during the quarter, incurring ₹11.1 crore in employee termination and related expenses. These restructuring costs totaled ₹39.7 crore for the nine months ending December 2024. ZEEL expects the impact of these losses under exceptional items to diminish in the coming quarters.  

Conclusion

Despite challenges in the advertising environment, ZEEL’s performance in subscription revenue and international markets signals resilience. The company’s strategic focus on diversifying revenue streams and its optimism about Budget 2025 suggest a potential recovery in the near term. As the broader market conditions improve, ZEEL aims to position itself for sustained growth.