Zee Entertainment Enterprises Limited (NSE: ZEEL) Q4 2025 Earnings Call dated May. 08, 2025
Corporate Participants:
Punit Goenka — Chief Executive Officer
Mukund Galgali — Chief Financial Officer
Unidentified Speaker
Analysts:
Unidentified Participant
Kavish Parekh — Analyst
Umang Mehta — Analyst
Sameer Gupta — Analyst
Jinesh Joshi — Analyst
Aditya Chandrasekar — Analyst
Priyankar Sarkar — Analyst
Abhishek Kumar — Analyst
Navid Virani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 FY ’25 Earnings Conference Call of Z Entertainment Enterprises Limited. As a reminder, all participant lines will be in 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 conference is being recorded. I now hand the conference over to the Investor Relations team. Thank you, and over to you.
Unidentified Participant
Thank you, Shri. Hi, everyone. Welcome to our Q4 FY ’25 earnings discussion. We have with us today our CEO, Mr Puneet Goenka, along with senior management team. We will start with opening remarks from Mr, followed by commentary on operating and financial performance by Mr Mukun, Deputy CEO and CFO. We will subsequently open the floor for question-and-answers. Before we get started, I would like to remind everyone that some of the statements made or discussed today on today’s conference call will be forward-looking in nature and must be viewed in conjunction with the risks and uncertainties we face. The company does not undertake to update any of these forward-looking statements publicly. With that, I’ll now hand the call to Mr. Thank you.
Punit Goenka — Chief Executive Officer
Thank you, Amit. Good evening, everyone. Thank you for joining us today to discuss the company’s performance during the fourth and final quarter of the financial year 2024 2025. The fiscal proved to be a mixed bag for the industry at large. While I will share the macro-level insights into the company’s performance during the year, Mokun will take you through the operational metrics of the quarterly performance. Let me begin by speaking about the industry performance during the financial year. Overall, the industry displayed immense resilience during the year-by taking cautious steps forward and pivoting strategies to enhance revenue generation across segments. The key steps taken by companies, including the channel’s pricing revision resulted in marginal subscription revenue recovery, contributing towards overall revenue growth.
Largely the focus remained on leveraging the unique levers across businesses to drive growth. Speaking about the company, I have indicated in the previous quarters that our focus has been firmly on enhancing profitability and building a healthy margin profile. The fiscal encompass encompassed several action-oriented steps that led to steady growth and gains on the balance sheet. I am pleased to share that the company is witnessing considerable progress year-on-year across key aspects, including a clear margin improvement, substantial reduction in Z5 losses and robust cash generation across businesses. Significant efforts were sewn in to strengthen the business segments with the lens of quality content, optimization and frugality.
As a result, the company’s performance during the financial year remained steady on the back of a sharp cost discipline exercised across the businesses. The new streamlined team, coupled with our focus on performance and profitability augured well for the company during the period. We are capitalizing on this strengthened foundation to drive future growth by balancing investments with a healthy margin profile. Our efforts remain directed towards sharpening the content, driving reach across platforms and enhancing monetization through existing and newer avenues. As we progress forward into the new financial year, our aim is to further build-on this momentum and strengthen the business. We will also be uploading a detailed presentation on the company’s corporate website, which will give you a comprehensive insight into our strategic vision to achieve the next phase of growth cycle and the company’s aspirations for the near-future. The year culminated on a softer note with a weak macroeconomic sentiment flowing into the 4th-quarter.
The momentum for rural recovery did not pick-up the pace we expected, resulting in a seasonally soft quarter. We witnessed a dip in advertising revenue growth and the aberration in subscription revenue numbers. But we remain hopeful of regaining the growth through targeted interventions going-forward. Like I mentioned, our focus has been to sharpen the content across platforms and we remain enthused by the efforts invested in presenting quality content offering to our consumers. During the quarter, we presented miniseries on ZTV, an innovative finite storytelling format to address the evolving preference of our consumers. We also implemented a groundbreaking TV and digital strategy for the premiere of Telegu film which clocked exceptional viewership numbers across linear and digital platforms. Going-forward, we will continue to enhance our offerings to create and deliver quality content to fulfill our consumers’ entertainment appetite on every screen.At a macro-level, there are strong levers to drive growth in the new fiscal and the company remains well-poised for the future. I continue to be optimistic about the opportunities in the new fiscal as well and our teams remain focused in this direction as we move forward. On that note, I would now like to hand over the session to Mukun, who will throw light on the key performance metrics reported by the company during the quarter and financial year. I look-forward to interacting with all of you during the Q&A round later. Over to you, Mukur. Thank you.
Mukund Galgali — Chief Financial Officer
Thank you, Puneet. Good evening, everyone, and great to connect with all of you. I will briefly touch upon some of the key financial highlights of these results. While FY ’25 was a challenging year for The industry, broadly driven by weak consumption, despite our — despite this, our profitability has improved during the year, driven by various initiatives taken by the company. The linear ad spending environment continued to remain soft during the year, especially for general entertainment. So as a result, our FY ’25 ad revenues were down by 11%. During the quarter, it declined Y-o-Y due to continued slowdown in the macro advertising environment, busy sports calendar and a higher base in Q4 FY ’24. Despite this, going-forward, we are continuing to look at ways to maximize ad revenues and will remain cautious in the near-term on the pace of our ad recovery revenue growth. We are also coming up with new strategies such as reentering into FTA space, new genres and markets to drive our ad revenue by further capitalizing on our content and reach. Moving to subscription revenues. The impact of NTO — with the impact of NTO 3.0 implementation and growth in digital subscription revenue have paved the way for growth during the year. And FY ’25 subscription revenue is up by 7%. During Q4 FY ’25, subscription revenue remained flat Q-o-Q due to a slowdown in the linear subscription, which was partially offset by the increase in digital subscription revenue. Further, from an industry backdrop perspective, the linear industry landscape remains in a healthy range with weekly impressions above 27 billion and weekly reach above 740 million. On the linear business front, we continue to be India’s strong number two TV entertainment network. Our viewership share during FY ’25 was 16.8%. Encouragingly, our efforts to regain viewership share of Z has shown some uptick during the year. In Q4 FY ’25, our viewership share dropped by-20 basis-points Y-o-Y due to the busy sports calendar, which was absent during the same-period in the last year. Now coming to the digital side, during this quarter, we — Sankran Ki Wastunam and Mrs are surpassed many OTT viewership records, underscoring our commitment to delivering high-quality and engaging content. This also reaffirms Z5’s healthy KPIs for usage and engagement. Z5 revenue for the quarter was also aided by a revised pricing strategy or in Language Max driving subscriber growth in addition to this, there was a sale of non-exclusive rights of a movie with Part 2 in March ’25. Further, during the year, Z5 EBITDA loss has reduced by INR5.6 billion to INR5.5 billion from INR11.1 billion in FY ’24. That’s about 50% reduction in the EBITDA loss Y-o-Y. This is in-line with our strategic priorities and this also reiterates that we remain sharply focused on maintaining a balanced cost structure and driving return on investments to sustain our long-term growth and that rigor also applies to how we assess and evaluate each revenue opportunity. On the music business, Z Music Company continues to be the number two music channel driven by its new-age music catalog and a rich library with over 18,000 songs and garnering over 164 million subscribers on YouTube and nearly 190 billion total video views during FY ’25. Further, in the music business, our profitability remains fairly healthy. Coming now to the music — movie business. During the year, Z Studios released 20 movies and achieved an all-time high in syndication revenue. During the quarter, in other sales and services revenues were up both Q-o-Q and Y-o-Y on the back of such higher number of movies produced, released and syndicated. On a full-year basis, other sales and services revenue was down as in the previous year, we had a strong box office performance of Gather 2, Bro and King of Kota. Given the nature of movie business, there is always going to be some peaks and troughs. Coming now to comment on costs and profitability, the team’s effort during effective — the team’s effort towards effective cost management across the businesses has led to a decline of 8% in overall operating costs during the year, resulting in a 390 basis-points EBITDA margin improvement to 14.4%, while in Q4 FY ’25, operating costs had increased by 14% Q-o-Q due to higher number of movie releases and ILT20. Our profit-after-tax PAT from continued operations for FY ’25 was at INR6874 million and for Q4, it was INR1886 million. On the balance sheet side, our focused efforts have enabled us to further strengthen our liquidity and financial position. During the quarter, we generated a strong FCF, driven by optimization of working capital and tax refunds. The cash and treasury investments increased during the quarter and as of March ’25 stood at $24.1 billion, which includes a cash balance of $4.9 billion, fixed deposits of $7.6 billion and investment in liquid mutual funds of INR11.6 billion. Our content inventory continued to decline during the year, driven by optimized acquisition. March ’25 content inventory advances and deposits were at $0.5 billion, lower by $3.7 billion on a Y-o-Y basis. Moving to FY ’26, we remain firmly committed to our stated aspiration for the year end and accelerating growth, profitability and cash generation continues to remain our priority. With this, I would like to hand it back to you, yes, yesri.
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 Parek from Batliwal &arani Securities. Please go-ahead.
Kavish Parekh
Hey, hi. Thanks for the opportunity. So we have demonstrated excellent cost-control over the past few quarters with the benefits clearly reflected in our margins. However, given the current softness in softness in advertising revenues and my expectation that ad revenues will likely remain sluggish for a couple of quarters. I believe that any further margin expansion will depend largely on growth in this area. So with that in mind, I would like to understand your approach to achieving 8% to 10% revenue growth and 18% to 20% margins in FY ’26.
Punit Goenka
So Mr Parik, I think there are two aspects to this. One being our re-entry into the FTA space, which did not exist last year. So there is a completely new segment of free-to-air where we’ve re-entered, that should help us to get some part of this achieved. And then also our aspirations with, as I spoke in my opening remarks about the miniseries and what we intend to do with Z5, etc will aid this growth factor that we are looking for?
Kavish Parekh
Understood. Understood. And secondly, I would like to get an outlook on the movie production and distribution side of the business for the next year.
Punit Goenka
We are looking at anywhere between 18 to 21 films that we will do next year. These will be largely, you know, handpicked on the basis of the content that resonates with the audiences as we have looked at in the last year and a half, two years of what’s working and what’s not working. But in terms of additional investments, that doesn’t require any further investments from our side.
Kavish Parekh
Understood. And just as a follow-up to my previous question, you mentioned about initiatives that you’re taking to sort of get back on the growth path on the advertising side. So-far in 1Q, anything that is worth highlighting that is working well for you, something that you would like to highlight? Is the part?
Punit Goenka
It should be uploaded. It will be uploaded by I think tonight or tomorrow morning itself, that will give you idea on what are the areas we are entering into. And then quarter-on-quarter, we will be reporting as to how — what is faring for us. And let’s not preempt that right now, otherwise, the call will move from Q4 to those discussions.
Kavish Parekh
All right. Thanks a lot. Thanks a lot. All the best.
Punit Goenka
Thank you.
Operator
Thank you. We’ll take our next question from the line of Umang Mehta from Kotak Securities. Please go-ahead.
Umang Mehta
Yeah. Hi, thanks for the opportunity. Puneet, you mentioned about FDA. Actually, would it be possible to share what was the ad revenue from FDA before you all exited, let’s say, two years back?
Punit Goenka
Yeah. Omang, you can look at the drop that we had when we exited in terms of our ad revenue. You will get an idea, but we don’t call-out These numbers specific to channels and genres. So it will be difficult for me to call that out on a public call.
Umang Mehta
Okay. Okay. In another words, may I if I can just ask, do you expect ad revenues to grow this year? I mean, not putting a number, but at least the declines to stop in F FY ’26?
Punit Goenka
I certainly expect, as I said, I am an optimist and I do believe that audience — sorry, advertising revenue if it does not grow significantly, but it will certainly grow in the inflationary number that we have given in a high single-digit kind of kind of.
Umang Mehta
Understood. Second one was on subscription. So on a sequential basis, there’s a drop-in linear subscription. Anything particular that happened and what is the outlook there for the next year?
Punit Goenka
The only thing that has changed in the linear subscription is some of the churn that the Bay TV platforms are seeing both on cable and satellite front. So we are addressing that through various of our other initiatives like OTT and some more plans that we have. But it’s a work-in progress. I don’t think there’s an overnight formula that we can fix it on, but we are working on it.
Umang Mehta
Got it. And just the last one on Z5. As you’ve had a good kind of control on costs and losses have come down significantly. Going ahead, how do we look at this business? I mean, would you look to increase investments, you know, increase growth or would it be a further reduction in loss except for next year?
Punit Goenka
I think any reduction in losses now will be on the back of revenue growth. There is not much meat left in us to try and cut costs. If you understand what I’m saying. So from that perspective, we will invest adequately as required to grow subscribers, both from an advertising perspective as well as from a subscription perspective..
Umang Mehta
Understood. Thanks a lot. This was very helpful. I’ll go back-in the queue. Thanks.
Operator
Thank you. We’ll take our next question from the line of Sameer Gupta from IIFL Capital. Please go-ahead.
Sameer Gupta
Hello, good evening, everyone, and thanks for taking my question. Sir, firstly, if I look at FY ’25, the EBITDA margin has improved by almost 400 bps, but this is fully driven by moderation in losses of Zifi. In fact, if I just exclude ZFI revenue and EBITDA losses, margins are actually down from ’26 to 23 and Z5 revenue growth here is just 6% for this year. So going-forward, would it imply that margin improvement you’re targeting, 18% to 20% by exit of FY ’26, this would come at the cost of growth in Z5 and follow-up here is what are the active subscriber numbers at Z5 and how do they compare with, let’s say a hot star.
Punit Goenka
So Sameer, as I said just earlier that there is no more room for cost-cutting for expansion in the EBITDA margin. Anything that has to come now has to come from revenue growth. And a part of the revenue growth even in FY ’25 has come from the subscription revenue growth that we have seen. So from that perspective, please don’t expect any more cost-cutting to be there on any vertical, we are pretty much at our optimal level of cost rationalization and workings. Sorry, what is the second question?
Sameer Gupta
The subscriber count in right now.
Punit Goenka
We don’t generally give that number, but we are in the top three active subscriber base in — compared to our competitors in the country. And Sameer, just to go back to the first point you made about your conclusion on linear, please keep in mind that you know the advertising and subscription revenue, the linear business fundamentally has very-high degree of operating leverage. So a lot of what you’ve seen play-out in terms of advertising, macro-led compression shows there. And the reverse of this is also true when the growth comes back. So it’s not really a structural conclusion to draw on the underlying cost structure or margin of the business. It’s just that business has very-high degree of operating leverage and it just flows through to margins. That’s why you’re seeing what you’re seeing, nothing to do with underlying health of the business.
Sameer Gupta
Got it, got it. I understand that. Thanks for this clarification though. Sir, second question, if I may squeeze in. On the STAR arbitration case, now I agree that there is a lot of uncertainty, but whatever you can answer, please, it will help. But now with the merger with Geo and STAR completed and you are now dealing with a different party in this. Is there a possible — possibility for an out-of-court settlement approach here? And if so, what could be the financial implications of that strategy?
Punit Goenka
So Sameer, it’s very early days, but we are open to all possibilities that are available to us, both legal and non-legal in terms of auto court settlements, et-cetera. But very early for us to comment there at all. Vikas, anything more to comment?
Unidentified Speaker
No, that’s it. It’s pretty much — that’s what PG has said and it’s still a long way to go, we will to get to know the outcome. But as PG said, we are definitely open and we are working on deploying all the strategies, legal or non-legal.
Sameer Gupta
Sure. Sure, sir. Sir. But if my memory serves right, the outcome is expected by early next year. Is that correct?
Punit Goenka
That’s correct. Yes.
Sameer Gupta
Got it, sir. I’ll come back-in the queue for follow-ups. Thanks for taking my questions.
Punit Goenka
Thank you.
Operator
Thank you. We’ll take our next question from the line of Jinesh Zoshi from PL Capital. Please go-ahead. Jinesh.
Jinesh Joshi
Am I audible?
Operator
Yes, you are, but there’s lot of disturbance. Can you use your handset mode please?
Jinesh Joshi
Am I audible now?
Punit Goenka
Yes, you are
Operator
Just ahead.
Jinesh Joshi
Yeah. Sir, my question is on the other expense run-rate of this quarter. So if I look at the number, it is at about INR87 crores. And historically, the run-rate has been in the band of about INR130 crores to INR150 crores. So just wanted to understand whether there is an element of one-off which you would want to call-out.
Punit Goenka
Just give me a second-generation.
Mukund Galgali
So Jinesh, in respect of the other expenses, there have been certain recoveries of bad debt, so which have been or provisions made earlier, which have been reversed, which were no longer required, which has resulted into this reduced other expenses line-item.
Jinesh Joshi
Yeah. Can you call-out the number? Is it possible?
Mukund Galgali
We’re not calling out number, Jinesh, but this is just a reversal which you typically have as you close the quarter when you run some provisions based on debtors and then that kind of stuff. So it’s not something material. We’re not calling it off. You could go back and look at maybe last 3/4 and work with that run-rate when you’re thinking from a modeling standpoint and so on.
Punit Goenka
But you were right, Jinesh, to say that, yes, it’s a.
Jinesh Joshi
Sure. And sir, secondly on EBITDA losses, I mean that INR75 crore number definitely, I mean if I compare it with the previous quarters, there is a material reduction that has come through. So can you just highlight which cost areas have been realigned the most? And would it be fair to assume that the reduction is basically driven by elements except for the content cost, because I mean, content is critical for growth going ahead. So I just wanted to know whether there has been any reduction on that side or not.
Mukund Galgali
So Janesh, you have to look at it on an annualized basis, if you look at it on a quarter-on-quarter basis, it could mislead you. There was a syndication of a film that sits in the revenue or sorry, or the EBITDA loss reduction in this quarter and that’s why you’re seeing the INR75 crore number. And I think Mukun called it out a movie called that we had sold outside, but the annualized run-rate is what you should look at to give you a better sense of what Z5 is going to be going-forward.
Punit Goenka
And just to add, Jinesh, like what we’ve said through the course of this year and previous quarters, the same operating leverage sort of stuff works here because cost has been largely streamlined. So as you get incremental revenue, that sort of flows through a little bit. So if you see this quarter, you’ve seen some lift which has come in revenue, partly because of syndication team Spoke about, but partly also just the underlying subscription revenue growth based on the language packs Mukun spoke about and so on. So that also helps in overall margin. So it’s a combination of both.
Jinesh Joshi
Got that. Got that. Just one last question from my side. I mean, is it possible to share what was our movie business revenue in FY ’25 and what proportion of that comes from overseas territories like the US. I just wanted to get some context on the tax that Trump had proposed on non-US films. I know it might be slightly difficult to preempt at this point in time, but I mean, is it possible to give some kind of color on what is the contribution from overseas territories like US?
Punit Goenka
Has been maintaining in multiple quarters in the past as well. Please look at the business as a portfolio business and the US or the international territories is a fraction of what the overall revenue of any of our business is. From that perspective, any impact to that is going to be minuscule from our perspective. We continue to treat this business as a strategic business because it is largely also feeding into our own ecosystem of television as well as OTT and music. Three verticals out-of-the four verticals that movie’s business operates in is feeding into our own organization. So please look at it from that perspective. And I don’t think that it’s going to have any material impact whatsoever.
Jinesh Joshi
Got it, got it. Thank you so much, sir and all the best.
Punit Goenka
Thank you.
Operator
Thank you. We’ll take our next question from the line of Aditya Chandrasheikhar from UBS Group. Please go-ahead., your line is unmuted. Please go-ahead with your question.
Aditya Chandrasekar
Yeah. Sorry. Can you hear me now?
Punit Goenka
Yes, we can
Operator
Go-ahead.
Aditya Chandrasekar
Yeah. Just a quick question, more of a top-down one. Post the Jeo Star merger, just wanted to understand what you’re seeing on-the-ground in terms of ad rates and in terms of content costs, are we seeing some impact of this consolidation on slightly higher ad rates or maybe a bit more rationalized content cost? Maybe not immediately, but kind of what are you looking at over the next two, 3/4 as this consolidation kind of gets absorbed and settled in? Just wanted to understand how we should think about overall kind of sector synergies post this consolidation. Thank you.
Punit Goenka
I think on the first part on the advertising front, it’s still very early days of. But I do expect that eventually it will have a positive impact on the overall industry. So let’s hope, keep our fingers crossed for the best. And as I said in my opening remarks, I am an optimist, so I will expect this also to benefit us. We are already seeing a lot of benefit flowing in on the acquisition of content, probably not on the production yet because production, as you know, is already a commoditized business that we operate at with multiple suppliers. But on acquisition of whether it is on films or the OTD business, we are already starting to see a lot of benefit flowing through for the entire industry.
Aditya Chandrasekar
Got it. And sorry, one follow-up. On the ad rate side, do you think that the merged entity of Geostar, they are kind of open to let — or let ad rates go up or are they being a bit more competitive and aggressive kind of keeping our status go as of now. Or in other words, in near-term, you don’t think that ad rates could go up, right, based on how they’ve been acting so-far?
Punit Goenka
I think we are all-in this business for making money, right? So I’m sure they will act in the interest of what is good for the industry?
Aditya Chandrasekar
Got it. Okay. Thank you.
Operator
Thank you. We’ll take our next question from the line of Priyankar Sarkar from Square 64 Capital Advisors. Please go-ahead your line is unmuted. Please go-ahead.
Priyankar Sarkar
Hi, sir. Good evening. Sir, I just wanted to zoom in a bit on the Z Music. And sir, what has been the growth for the music segment for the entire FY ’25? That’s point one. And second follow-up to that is, what is the capex we are planning to do in acquiring new content?
Mukund Galgali
So I’ll give the second one, which is what I get — what I would have stated publicly in the past as well, whatever capex we incur for acquisition of content is on the basis of what we run-through our P&L. So if we run INR100 through our P&L, then INR100 is available to us for newer acquisitions. On the first part, Vikas, you to — yeah.
Unidentified Speaker
So in terms of the growth overall on the music segment, we have seen our growth kind of tapering in single-digits. The main reason being some of the homegrown streaming platforms have shut-down or they have slowed down. But if you take — if you strip them out-of-the equation and you see on a like-to-like basis on other platforms, the growth is pretty satisfactory. So we are expecting all that to get settled already would have settled in this year. And from this year onwards, again, we are looking at the growth numbers inching up again.
Priyankar Sarkar
Okay. Sorry. Just one follow-up. So to clarify my question for the second part. I wanted the capex number for the music division. And at least an indicator — indication. With same answer on that.
Mukund Galgali
Yeah, we see, CapEx division, we don’t call-out the numbers separately, but as we said, whatever we are investing gets flow — I mean, it’s flowing through the P&L. And we make sure that we add enough adequate number of songs every year so that the library is refreshed and growing year-on-year.
Priyankar Sarkar
Sure. Okay. Thank you very much. Wish you all the best.
Punit Goenka
Thank you.
Operator
Thank you. We’ll take our next question from the line of Pankaj from Bank of America. Please go-ahead.
Unidentified Participant
Hi, good evening. Thank you for the opportunity. Two questions from my side. First one on Z5 and Puneet, commendable job on lowering EBITDA losses. What next from here? Do you have a target in mind, let’s say, breakeven in four quarters, six quarters? Anything that you would want to share?.
Punit Goenka
I think I had already stated that sometime back that counting 2025, we were looking at a three-year time horizon for. Given the softness in the market, it may shift a little bit over Niche, but it’s not going to be significantly different from where we had. And if there is any significant change to that, we will of course come back to you and give you enough adequate time and guide you on that.
Unidentified Participant
Understood. And Puneet, any thoughts about adding a lot — a couple of more disclosures on the OTT side.
Punit Goenka
So we are already considering that — and you will see that in the presentation that we will be uploading very soon.
Unidentified Participant
Sure, that’s helpful. And the last question, and while we appreciate that, the focus is now on growth in revenues going ahead. So when you break it down into both your advertisement and subscription, so what levers does management have in-place, let’s say, bearing the macro uncertainty, FMCG wants to deliver or not, a busy cricketing calendar season and all. So what sort of growth levers do you perceive that will lead to, let’s say, an 8%, 10% sort of continued growth for next two, three-odd years? How do you want to think about that?
Punit Goenka
No, we have to leverage our biggest strength, which is the language market and that’s where the growth will come from for both linear as well as for digital
Unidentified Participant
Okay, good. That’s it from my side. Thank you, Punit.
Punit Goenka
Thank you.
Operator
Thank you. We’ll take our next question from the line of Abhishek Kumar from JM Financial. Please go-ahead.
Abhishek Kumar
Yeah, hi. Good evening and thanks for taking my question. First-off, any change in our guidance that we had provided earlier because I didn’t find that in the presentation, 18% to 20% EBITDA margin next year, I mean, fiscal ’26, every I mean, are we still sticking to that guidance or is there any change in the timelines, et-cetera?
Punit Goenka
Yes, Abhishek. We are sticking to that same guidance.
Abhishek Kumar
All right. Okay. So thanks for the clarification. Second question is on linear subscription. You mentioned some churn, et-cetera, which resulted in sequential decline. How are we seeing the market evolving? Are instances of cord-cutting continuing, is there any stability in the number of pay-TV households and Also the appetite for the market to absorb further price hikes from here on?
Punit Goenka
So the price hikes, if you look at historically have been in single-digits itself. So price hike — price hikes have not been very significant from that perspective. I think the churn is happening by a natural cause, but we are also still seeing that television penetration in India is still growing. Of course, a large part of that is going to free-to-ear and potentially not coming to pay-TV. So we are looking at the ecosystem, how it evolves over the next couple of years, but I’m pretty certain that it will stabilize at a certain level. And then whenever it comes to the subs will stabilize and of course, will remain free-to it.
Abhishek Kumar
Sure. Final question on the fund utilization, the INR200 crore FCCB, any plan or any target that we have identified, any timelines of when and where we want to deploy this fund thank you so much.
Mukund Galgali
So, yeah. So on that, we are still evaluating a couple of assets as we speak, but we’ll come back to you as soon as we find the right mix of the right valuation and any asset which gives us the right scalable opportunities. There are few interesting assets which we are looking right now, but haven’t finalized yet.
Abhishek Kumar
Sure. Okay. Thank you and good luck.
Punit Goenka
The biggest lever for us when we consider any asset is that it has to be value-accretive to us.
Operator
Thank you. We’ll take our next question from the line of Navid Virani from Bastian Research. Please go-ahead.
Navid Virani
Hi, sir, thank you for the opportunity.
Operator
We please?
Navid Virani
Is it better now?
Operator
A little hello. Go-ahead.
Navid Virani
Yeah. Shall I go-ahead?
Operator
Hello.
Navid Virani
Yes, thank you for the opportunity. And first of all, congratulations on the losses for U5 million this year. So just wanted a clarification on revenue and profitability for U5. So if I understood correctly, what you meant to say in the answer to some previous question was
Punit Goenka
How
Operator
Was
Navid Virani
The revenue growth that we
Punit Goenka
— we could not understand.
Navid Virani
Is it okay now?
Mukund Galgali
Yeah, better.
Operator
Go-ahead.
Navid Virani
Yeah. So wanted one clarification regarding revenue growth and profitability for Z5. So if I understood correctly, what you answered in one of your previous questions was this — the revenue growth that we see in Z5 this quarter was also driven by syndication revenue, which is one-off in nature and that resulted in a stronger profitability or a better loss ratio, which might not be steady-state going-forward. Is that understanding correct, sir?
Mukund Galgali
Yes. That’s partly correct,. But just to be clear, even if you would have taken syndication out, you would have still had revenue growth and you would have still had improvement in the margin journey. So the only point I want to leave you with is, it is not that the quarter-on-quarter improvement you’re seeing both on growth and margin is entirely because of that. Yes, the syndication deal has aided, but ex that, there will still be improvement both in terms of growth and margin.
Navid Virani
Perfect, perfect. Understood. So is it fair to assume that the kind of losses that we saw in Q3 can continue to be steady-state as far as E5 is concerned until you know, some more time.
Punit Goenka
Our aspiration, Navin, is going to be to reduce those losses on the basis of bringing in more growth in terms of revenues both on advertising and subscription. But if you wanted to model it from your perspective in your business case, yeah, that’s a safe assumption to go with
Navid Virani
Perfect, perfect. Thank you for the clarification. Wish you all the best. Thank you.
Punit Goenka
Thank you,.
Operator
Thank you. We’ll take our next question from the line of Mayur Avasti, an Individual Investor. Please go-ahead.
Unidentified Participant
Good evening. Am I audible?
Punit Goenka
Yes, ma’am.
Operator
Please go-ahead.
Unidentified Participant
Yes. As we have seen in past two quarters that our advertising revenue has declined. So what do you see — foresee in the near coming two quarters might be our advertising revenue will take-up shoot? And my second question is related to — I mean like this is apart from Q4, but considering the whole year for FY ’25, there was some case that our competition in the market is again streaming on and our prices in the market has also gone very down. So is there any case that our promoter is looking to increase their stakes?
Punit Goenka
So on your first question on advertising, the market is still under pressure. Very difficult for me to me to project when the market will start bouncing back. But we do expect that the bounce-back will start very soon post the cricket calendar ends for the entertainment networks. The second part, you mean, mean it’s about the pricing and promoter volume to increase stake?
Unidentified Participant
Yes. I mean like I — see we have a very competitive advantage as compared to the overall market. However, I mean like it impacts if the prices of the stock goes down, right, in which case. However, it is not the true reality. But if that is the case, then might be it will show some other picture.
Punit Goenka
So the promoter is always stated publicly that they would want to increase their stake at a certain stage going-forward?
Unidentified Participant
Understood. But just wanted to know that it was being told previously, but in the coming quarters or in FY ’26, is there any possibility to I mean really come on that.
Mukund Galgali
So Mr Mayur, as and when the Board decides and there is an update, we will let you know as soon as possible.
Unidentified Participant
Okay. Thank you.
Punit Goenka
Thank you.
Operator
Thank you. We’ll take our next question from the line of Umang Mehta from Kotak Securities. Please go-ahead.
Umang Mehta
Yeah, hi. Am I audible?
Punit Goenka
Yes.
Umang Mehta
Yeah. Thanks for the follow-up. Just on ZFI, if you can elaborate on what change did you all do for the regional market? And how salient are the regional kind of genres for ZFI? Any color you can give would be helpful. Thank you.
Punit Goenka
So we’ve had a strategic shift in terms of our pricing for the language markets. Earlier, we were selling only one pack which was all-you-can-eat across languages. And through our own research, we realized that the consumer feels that because their consumption is largely restricted to one or two languages, they are being cheated in terms of what we are charging them. And therefore, we have redesigned the entire pricing strategy, which was launched
Mukund Galgali
In December
Punit Goenka
— in December.
Mukund Galgali
So the results are visible and
Punit Goenka
The results are already visible as Mukhun has said and yeah, so that’s what we intend to do.
Umang Mehta
Understood. And how sales — I mean, how big if not numbers, but Call-IT, is it that the regional are dominant for?
Punit Goenka
The, what happens is that content consumption is uniform across platforms as I look at it. The way the television market behaved, eventually the OTT market will behave the same way. Now whether that happens in 1/4 or that happens in two years time, we have to wait-and-watch and transform ourselves from that perspective.
Umang Mehta
Understood. Okay, sure. I’ll take it offline. Thank you.
Punit Goenka
Yeah, okay.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. On behalf of Z Entertainment Enterprises Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank