Zee Entertainment’s Q2 revenue up 8% QoQ, but profit slips 63% amid soft ad market and higher content costs

Zee Entertainment Enterprises Limited (ZEEL) reported a mixed performance in the second quarter of FY26, with revenue growth driven by digital and subscription gains offset by weaker advertising spends and higher content investments that weighed on profitability.

The company’s operating revenue rose 8% quarter-on-quarter to ₹1,969 crore, while profit after tax dropped 63% year-on-year to ₹76.5 crore, as per its earnings release filed with stock exchanges.

Zee’s EBITDA margin declined sharply to 7.4%, from 16% in the same quarter last year, primarily due to a soft advertising environment and an uptick in programming and marketing costs.

Digital growth offsets slowdown in TV advertising

Zee’s digital businesses — including ZEE5 and other online verticals — continued to perform strongly.
ZEE5 posted its highest-ever quarterly revenue, crossing ₹310.8 crore, up 32% year-on-year, marking sustained growth in usage and engagement.
The company also reduced its digital EBITDA loss by ₹127 crore YoY, signaling progress toward its breakeven target.

In contrast, domestic advertising revenues declined 12% YoY, with FMCG and discretionary spending remaining muted. Zee noted that the festive season in Q3 is expected to aid short-term recovery.

Subscription revenues, meanwhile, showed steady growth, aided by rate hikes and increased penetration across both linear and digital platforms.

TV network share improves; content investments weigh on margin

Despite the challenging ad environment, Zee’s television network market share improved by 100 basis points sequentially to 17.8%, supported by Hindi and regional channels like Zee TV, Zee Marathi, and Zee Tamil.

The quarter also saw two new GEC launches and a higher investment in non-fiction programming, which drove up costs. The company said it continues to optimize its cost structure while selectively investing for future growth.

Zee Studios released eight films during the quarter (five Hindi, three regional), while Zee Music Company maintained its leadership on YouTube with 172 million subscribers and 54 billion video views in Q2.

Healthy balance sheet; ₹2,114 crore in cash and equivalents

Zee maintained a healthy liquidity position, with ₹2,114 crore in cash and treasury investments as of September 2025.
Content inventory and advances declined to ₹6,990 crore, reflecting tighter acquisition discipline and a focus on optimizing content pipelines.

H1 FY26 snapshot: revenue dips, profit contracts

For the half-year ended September 2025, Zee reported:

Operating revenue: ₹3,794 crore (down 8% YoY)

EBITDA: ₹374 crore (down 37% YoY)

EBITDA margin: 9.9% (vs. 14.3% in H1 FY25)

PAT: ₹220 crore (down 33% YoY)

The company said profitability was impacted by muted advertising, though subscription and syndication revenue growth helped cushion the decline.

ESG progress: among top 10% of global peers

Zee also highlighted its ESG performance, noting a 93rd percentile ranking globally in the Media, Movies & Entertainment category on S&P Global’s ESG index.
The company achieved a 7.3% reduction in greenhouse gas emissions and improved its waste recycling by 5.7%, as per its FY25 ESG report published in September.

The road ahead: focusing on content, digital, and cost efficiency

While Zee’s overall profitability continues to face short-term pressure, the company remains focused on expanding its digital revenue base and strengthening its television network share.

The management noted that a pickup in festive advertising, along with continued subscription growth and cost optimization, is expected to improve performance in the coming quarters.