InvestorQ : How did you find the quarterly results of Zee Entertainment for the Dec-20 quarter?
Lavanya Subramanian made post

How did you find the quarterly results of Zee Entertainment for the Dec-20 quarter?

Anamika Sodhani answered.
2 weeks ago

India’s largest media conglomerate, Zee Entertainment, reported stellar numbers after a long gap of time. It reported 14.6% higher net profit of Rs.400 crore for the Dec-20 quarter. What was more interesting, however, was that the revenues were up nearly 30% at Rs.2757 crore in the quarter.

This spurt in revenues was largely driven by a sharp bounce in advertisement revenues, even as subscription revenues continued to remain stable to buoyant. Let me tell you why ad revenue is critical to Zee in particular. Ad revenues had taken a big hit post COVID as most corporates had opted to go slow on spending. Bouncing back from those levels is surely creditable.

While the ad revenues grew about 7.5% on a yoy basis that may not give you the real picture. What matters in ad revenues is the real growth was seen in sequential numbers when COVID impact was the most visible. This is a signal that operations and top line are getting back to normal pre-COVID levels. Total revenues, incidentally, also included a sum of around Rs.600 crore from a content syndication deal.

The problems for Zee in the last few years have been manifold. It has had a tough last two years as it had to face an unprecedented group payment crisis to mutual funds especially since Zee and the promoters had guaranteed such payments. The crisis was overcome, although the original promoters lost control. Later, COVID took a toll on operations. The future potential assessment of COVID losses is negligible and that could be real good news.