Zee Entertainment Enterprises Limited (NSE: ZEEL) Q3 2026 Earnings Call dated Jan. 22, 2026
Corporate Participants:
Ankit Arora — Investor Relations
Mukund Galgali — CEO
Analysts:
Kavish Parekh — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q3FY26 earnings call of Zee Entertainment Enterprises Limited. As a reminder, all participant lines will be the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Ankit Arora, Head of Investor Relations, Zee Entertainment Enterprises Ltd. Thank you. And over to you sir.
Ankit Arora — Investor Relations
Thanks. Ishishree. Hello everyone. Welcome to our 9 months and Q3 FY26 earnings discussion. We hope you had an opportunity to review the results Today we are joined by our Deputy CEO and Chief Financial Officer, Mr. Mukund Kalgali, along with the senior management team. Our CEO Mr. Puneet Goenka is currently in the US and due to unavoidable last minute exigencies he is unable to join the call today. We will start with Mukund covering the details about our operating and financial performance and we will subsequently open the floor for question and answer session. Before we get started, I would like to remind everyone that some of the statements made or discussed on today’s conference call will be forward looking in nature and must be viewed in conjunction with risks and uncertainties we face.
The company does not undertake to update these forward looking statements publicly. With that said, I would now hand the call over to Mukund for his remarks.
Mukund Galgali — CEO
Thank you Ankit and good evening everyone. It is always a pleasure to connect and interact with all of you. I hope you had the opportunity to go through our Q3FY26 results which have been uploaded on our corporate websites as well as the stock exchange portals. In my remarks today, I will focus on providing context to our performance. During this quarter I will begin with an update on our digital business. We are pleased with the progress made during this quarter in digital business. We released 39 shows and movies including 11 original series. These enhanced content offering across seven languages coupled with a revised pricing strategy on our digital entertainment platform Z5 has resulted in a 73% year on year increase in our digital revenue to Rs.
4180 million. This marks our highest quarterly revenue so far in the digital business. In this business we continue to maintain a balanced cost structure coupled with and coupled with strong revenue growth. It has resulted us to post an EBITDA of rupees 564 million compared to a loss of rupees 1362 million in the same quarter last year. This marks the first quarter in which our digital business has delivered a positive ebitda. The revenue growth was aided by syndication revenues and revised pricing agreement with the telco player during this quarter along with improved advertising revenues. We remain confident of improving our unit economics in this business in the medium term and drive sustained returns on our investments.
Moving to Subscription revenue Our overall subscription revenue grew by 7% year on year, primarily driven by the growth in digital business and successful renewals of contracts with DPOs in the broadcast segment. Turning to our broadcast business, the overall linear TV landscape continues to remain stable. With weekly impressions of above 28 billion and a weekly reach exceeding 730 million, we continue to maintain our position as India’s strong number two TV entertainment network. As we look at the viewership share for quarter three, we gained 60 basis points year on year taking our network share to 17.5%. Our flagship Hindi GC channel ZTV continued to witness strong GRP growth during the quarter.
Along with this, we have also fortified our position in the east and with Zee Bangla regaining its leadership, we are also pleased to share that Zee remained the fastest growing network in the south with a share of 17.7%. For Z Marathi, the new content slate has resonated strongly with the consumers across Maharashtra enabling us to achieve a market share of 33.6%. This reaffirms that the strategic initiatives we have implemented over the last few quarters are delivering results in the right direction. On the advertising front, we continue to observe a gradual and sequential pickup in the ad spends by advertisers, although it declined on a yoy basis, largely led by softness in FMCG spending.
Advertising revenues were up 6% quarter on quarter and though they are down 9% year on year reflecting a slow but steady pace of recovery. While we are witnessing encouraging conversation with advertisers, however, we are yet to see the full benefits of GST cut and a sustained pickup in FMCG advertising spends towards brand building. Looking ahead, we remain optimistic about a gradual recovery aided by our ability to leverage our improved network share and continue growth in the digital business and positive spends by FMCG players on their brand building initiatives. Moving to our music business, during the quarter we garnered over 51 billion total video views with more than 175 million subscribers on YouTube.
This performance was driven by a New Age music catalog along with a rich library of over 18,000 songs. Profitability in the business remains healthy and we continue to diversify our catalog investments across various language markets on the studio business. During the quarter we released eight movies, one in Hindi and seven in regional languages, of which three were our own productions and five were distribution deals. We also acquired theatrical and satellite rights for Kantara Chapter 1 and Akhanda during this quarter, which has contributed to a strong growth in our other sales and services. Our continued focus on this indication vertical, as indicated in the previous quarters is also showing promising results, though it is at a nascent stage.
As a result, overall other sales and services grew seven times on a yoy basis. At this juncture, I would also like to touch upon the new strategic initiatives launched by the company during the fiscal the microdrama app bullet continues to garner steady gains with its unique model of gamifying the viewing experience and engaging consumers beyond content in order to further tap into the younger consumer base, the company entered the kids entertainment segment during the quarter with the launch ofKIDZ on Z5. Moving to costs and profitability, our overall operating cost increased 12% quarter on quarter, primarily due to higher programming cost on account of Preponement of the ILT20 cricket matches into Quarter 3 and acquisitions of Kantara Chapter 1 and Akhanda 2.
Excluding these items, overall operational costs would have declined by mid single digit on a quarter on quarter basis with a 15% increase in operating revenue and tight management of fixed costs. Our EBITDA margin improved by 310 basis points quarter on quarter to 10.5%. Profit after tax stood at rupees 15.48 million which grew 2x on a sequential basis on the balance sheet. Our focused efforts to strengthen our liquidity and financial position continues to strengthen our liquidity and financial position. Cash and treasury Investment as of December 2025 stood at Rupees 21.8 billion, comprising of cash of Rupees 5 billion, fixed deposits of Rupees 7 billion and investments in liquid mutual funds of Rupees 9.8 billion.
Our content inventory declined as of December 2025, driven by disciplined and optimized acquisitions. Overall, our content inventory advances and deposits stood at rupees 69.3 billion, down by rupees 1.2 billion over the last nine months. Further, I’m also happy to share the progress we have made in our ESG journey, which is also reflected in Our score of 51 out of 100 in the S and P Global Corporate Sustainability Assessment in the media and entertainment sector. This ranks Z Amongst the top 5% of global players in this sector going forward, we will continue to accelerate our ESG agenda as we move ahead.
Our focus remains on driving revenue growth through digital business. Implementation of new strategic initiatives coupled with improved advertising environment, prudent cost efforts and operating leverage will help drive profitability and cash generation. With that, I would like to hand it back to Ankit. Thank you very much.
Ankit Arora — Investor Relations
Thanks Mukund. Just a reminder for everyone before we start the Q and A session, Puneet has been able to join the call and he’s available to answer any questions that you all may have. Yashastri now we can open the floor for question and answer session.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We’ll take our first question from the line of Kavish Parekh from BNK Securities. Please go ahead.
Kavish Parekh
Hi team, thanks for the opportunity. My first question pertains to the advertising side of the business. So nine months revenues are down about 12%. The year could very well end with the same kind of decline number. Now it has been 2, 3/4 since you gave out details on key initiatives that you plan to pursue to sort of bring back some growth in the segment. So do you think F27 could start seeing some benefits on account of this coupled with a low base? And to add to that network shares for you are also remaining steady. So what would be your growth targets and maybe revised targets for the EBITDA margins for the next fiscal?
Mukund Galgali
So Tavish, slightly early if we were to kind of look at FY27, but the good news is that I’m sure as to what you rightly mentioned that we have been seeing the moderation in our Y o Y decline and we continue to kind of have a very encouraging and positive conversations with our FMCG players and of course with the GST cuts and all what has happened over the last 12 to 18 months in the macro backdrop, we remain still optimistic certainly for FY27 outlook, but it will be too early for us to kind of give a specific number guidance at this stage.
However, we stay absolutely optimistic given where we have seen in FY26. We should start to kind of see an inflection point over the next few.
Kavish Parekh
Quarters and anything on margins or even that slightly early, slightly Early Kavish, at this stage.
Mukund Galgali
However, as to what I’m sure you would have noticed, we continue to kind of maintain a very, very prudent cost structure and you would have witnessed that in the nine months which is what we have declared. You know, our endeavor is to improve margins from where we will end in FY26 and that certainly stays in the top priority.
Kavish Parekh
Sorry, if I may just add the two, the questions that you asked definitely go hand in hand, right? So while we are optimistic about our advertising growth in the coming quarters, but it will go hand in hand with the margin structure because I think our cost structure is pretty much at the leanest that it possibly could be in order to keep our market share, etc. At the levels that we have been operating at. So just to add to that Ankit, just to give a little bit more clarity.
Mukund Galgali
Sure, thanks for that. Secondly, congratulations on hitting break even in Z5. Growth here was far beyond expectations but that was partly aided by syndication revenues and the telecom deal. So what would be a sustainable growth rate here? And Then going into 4Q and F27 at what rate of growth say do you achieve a breakeven that’s much more sustainable.
Ankit Arora
So Kavish, just to add. Sure pg, please go ahead.
Kavish Parekh
Could you go ahead and I’ll add whatever.
Mukund Galgali
Sure. So Kavish, as to what you would have noticed, I think this year we have reached ARR business in Z5 of north of 1000 crore. Without getting into specific, you know, it’s a good enough number for us to kind of start looking at this business driving towards a medium term sustained profitability on the revenue front. While of course the base will now start to kind of come into play. But we still believe that Z5 will continue to be our fastest growing vertical amongst other verticals which is what we are present in. And you know, with the first quarter having achieved on the EBITDA positive side, we stay committed to us having better returns on this business as we move forward.
And that was the target, which is what we had said at the start of the year, to break even by FY26 that this should certainly reflect for the street. We stay committed and with our prudent cost efforts and operating leverage which will drive the business on a positive unit economics going forward.
Ankit Arora
And Kavish, this is Mukund here. I would also like to add that with the seven language packs which was rolled out in quarter two, I think those are getting sort of absorbed by the market and you know, know the traction will continue along with the new initiatives we have taken in terms of kids, which was just launched in the last week of December and a few other initiatives which are linked to our digital business, we are confident of, you know, having accelerated growth in this business.
Kavish Parekh
A book keeping question from my side. So your depreciation and amortization amount has been declining quarter after quarter over the past few years. So could you explain this movement?
Mukund Galgali
No. This has been because in the last few years our capitalization has not been very high. So it’s just a normal amortization as per the policy. And it’s just that the rate of our addition to fixed assets has not been very high and the Bangalore Development center has plateaued and there were certain investments which we had done earlier in Tech center which was was amortized. So that impact is being reflected in the books.
Kavish Parekh
Understood? Understood. And I mean if I can squeeze in with one more operation question, what would be your latest headcount number and maybe could you help us with the trajectory or how has it moved over the past few quarters?
Mukund Galgali
See, so the number is if I.
Kavish Parekh
Get job in here.
Ankit Arora
Sure, sure, please. Yeah.
Mukund Galgali
So as we as ANIT also mentioned, we are operating and I also retraded, we are operating at a very optimized cost structure for the company. Our headcount is pretty much the most competitive in the industry in terms of number of people per revenue of rupee or dollar that we earn. And I think beyond that giving any more information would be competitive in nature. But rest assured we will continue to see optimization in terms of both quality and quantity in our manpower cost. Even if you look at our personnel cost, it’s pretty much very, very competitive in the industry and we’ll continue to maintain that.
Ankit Arora
I remember the last time when we had this employee based rationalization. I think our top tier of the management had sort of moved out and we had elevated our. The next leg of the management is similar happened this time or this rationalization was across the chain.
Mukund Galgali
Across the company. It’s across the company. And Mukur, you can take it further.
Mukund Galgali
Yeah Kavish, this is based on our strategy of Omnichannel.