Zee Entertainment published its second quarterly results on 11th November 2021. Even though the pandemic impacted the business for the media giant in the first half of the year and led to the business incurring additional costs, Zee Entertainment recorded positive momentum and growth in profits. 

The media corporation reported a sharp spike in the consolidated PAT for the quarter under review. Net profit for the company jumped by 187.3% YoY as it grew to Rs. 270 crores from Rs. 94 crores in Q2 FY21. On a sequential basis, the net profit jumped 26.4% from Rs. 213.74 crores in Q1 FY22. 

As far as the pre-tax numbers are concerned, the Profit Before Tax, was reported to have doubled over the last financial year. It rose 114.6% YoY to Rs.359 crores in Q2 FY22 from Rs.167.3 crores in Q2 FY21.

Revenue from operations increased 15% YoY to Rs.1978 crores in the current quarter from Rs.1721 crores. The revenue increase was attributed to the growth in the domestic ad revenue and a movie syndication deal. Even though the subscription revenues fell marginally by 1.5% YoY, it did not impact the overall revenue due to revenue growth from other sources.

The company’s EBITDA registered a growth of 31.4% YoY as it rose to Rs.412.1 crores in the second quarter of FY22 from Rs.313.6 crores in the second quarter of FY21. On a sequential basis, the EBITDA grew by 19.8% egged on by the growth in the advertisement revenue of the company. The EBITDA margin also improved 260 basis points on a yearly basis, rising from 18.2% to 20.8%. 

Zee Entertainment Q2 Results – Hits 

  • 187% YoY growth in PAT, from Rs.94 crores to Rs.270 crores. On a sequential basis, PAT jumped 26.4%
  • 15% YoY increase in the revenue from operations, from Rs.1721 crores to Rs.1978 crores 
  • 31.4% YoY growth of EBITDA which increased from Rs.313.6 crores to Rs.412.1 crores. The EBITDA margin also improved by 260 basis points to stand at 20.8%
  • 114.6% YoY jump in the PBT from Rs.167 crores to Rs.359 crores
  • 20.1% YoY growth in domestic ad revenues

Zee Q2 results – Misses

  • 1.5% YoY fall in the subscription revenues
  • Fall in the market share on a yearly basis as the share dropped to 17.7% in Q2FY22 compared to 19% in Q2FY21

Management commentary

In the exchange filing, Zee Entertainment Limited stressed on the fact that its domestic ad revenues grew 20.1% and 18.9% on a YoY and QoQ basis, respectively. Even though revenue grew, the first half of the quarter was adversely impacted due to the COVID-19 pandemic. The company also stated that the delay in the implementation of the NTO 2.0 (New Tariff Order) has impacted its pricing, leading to a fall in subscription revenue. NTO 2.0 is the new and updated broadcast tariff regulation implemented by TRAI. These regulations were supposed to start from December 1, 2021, but now they have been pushed to be implemented from 1st April 2022. 

However, with the opening up of cinema theatres across India, the theatre revenue is expected to grow in the second half of the current financial year. The company also boasted of a slew of movies, across languages, which are proposed to be released across cinemas in the coming months.

Other things to know about Zee Quarterly Results

  • A part of the Zee Entertainment Group, Zee Music Company registered a 60% YoY growth in Youtube video views. Moreover, it added more than 1 million subscribers to its Youtube viewership in Q2 FY22
  • Zee Network’s share grew by 70 bps due to the launch of new shows across all markets
  • Zee5’s global MAU’s were recorded at 93.2 million in Q2FY22 after the addition of 13 million MAUs sequentially
  • The company also had an all-India TV network share of 17.7% which grew from the last quarter’s figure of 17%
  • The company had a fair share of drama on the corporate front in the quarter. Invesco, the single largest shareholder of the company, together with OFI Global China Fund LLC has been opposing the company’s proposed merger with Sony Pictures India Limited. Moreover, they are proposing an extraordinary general meeting of the company to oust its MD Punit Goenka. This had an adverse impact on the stock when it hit the news media. There is still some clout around this topic that investors may need to keep an eye out for.
  • The company has a P/E ratio of 30.9 against the industry average of 20.5 while its P/B ratio is at 3.02 against the sector average of 10.72.