Zee Entertainment Enterprises Ltd.'s third-quarter profit fell by more than half sequentially and failed to surpass market expectations as higher costs dented margin.
The company's net profit saw a 52.4% decrease quarter-on-quarter to Rs 58.5 crore in the October-December period, according to an exchange filing on Tuesday. This compares with the Rs 90.54-crore consensus estimate of analysts tracked by Bloomberg.
Zee Entertainment Q3 FY24 (Consolidated, QoQ)
Revenue declined 16.25% to Rs 2,045.7 crore (Bloomberg estimate: Rs 2087.3 crore).
Ebitda down 38% at Rs 209.2 crore vs Rs 337.4 crore (Bloomberg estimate: Rs 209 crore).
Margin narrows 359 basis points to 10.22% vs 13.81% (Bloomberg estimate: 10%).
Net profit down 52.4% at Rs 58.5 crore vs Rs 123 crore (Bloomberg estimate: Rs 90.5 crore).
The company, in the exchange filing, said that it may face pressure on margin due to incurring one-time higher costs towards implementing the interventions.
Gradual margin improvement will kick in, and FY25 margin will be meaningfully better than FY24, it said. Zee said that it aspires to deliver industry-leading 18-20% Ebitda margin.
Given the current cost baseline and lead time associated with implementing these margin improvement interventions, it expects to take six to eight months for these efforts to start showing up in the performance, it said.
On the deal termination update with Sony Group, the media company said that its board continues to monitor progress, and the claims and the termination fee against the company are not tenable.
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