By Aleef Jahan C S and Komal Salecha
(Reuters) -India’s Zee Entertainment Enterprises said on Thursday its full-year profit margin and advertising growth targets look challenging to meet after quarterly profit fell more than 60% as advertising sentiment remains weak.
The broadcaster’s 8–10% ad revenue growth goal for the year “looks a bit difficult” to achieve, but it is hopeful of a second-half recovery, chief financial officer Mukund Galgali said on a post-earnings call.
He said revenue growth and profitability are expected to be back‑ended, helped by investments in new content and by recent cuts in national sales tax.
Broadcasters including Zee, which rely heavily on advertising, have been hit by a sharp pullback in spending, particularly from major consumer companies facing sluggish demand.
Galgali said Zee’s 18–20% core profit margin outlook for the year also looks “difficult right now,” given higher programming spend and broader cost inflation.
Zee, which runs television channels such as ZeeTV and ZeeCinema, has been investing across its digital and linear businesses, launching new channels and adding content. Those costs have risen, but the company said it expects benefits in the medium term.
Core profit margin for the quarter fell to 7.4% from 16% a year earlier.
Its consolidated net profit dropped to 765 million rupees ($8.71 million) for the quarter ended September 30, from 2.09 billion rupees a year earlier. Overall revenue slipped 2% to 19.9 billion rupees.
Advertising revenue, which makes up about 40% of total sales, fell 11% year on year, the twelfth decline in the past 13 quarters.
Core losses at Zee’s streaming service, ZEE5, narrowed by more than 80% as revenue rose 32%, putting it on track to break even, the company said.
Shares of Zee closed down 0.6% after the results.
($1 = 87.8625 Indian rupees)
(Reporting by Komal Salecha and Aleef Jahan in Bengaluru; Editing by Tasim Zahid and Rashmi Aich, Eileen Soreng)
