Zee Entertainment Enterprises witnessed a notable surge in its share price during intraday trading on the BSE this Thursday, January 22, as investors showed renewed interest ahead of the company's December quarter earnings announcement. The stock opened at ₹82.22, slightly above its previous close of ₹81.94, and climbed as much as 4% to reach an intraday high of ₹85.15. This upward movement is poised to break a four-day losing streak, during which the stock had plummeted by over 9%, reflecting a significant rebound in market sentiment.
Anticipation Builds for Q3 Financial Results
Fresh buying interest has emerged as Zee Entertainment prepares to release its unaudited financial results for the quarter and nine months ended December 31, 2025. In an exchange filing dated January 14, the company confirmed that its board of directors will consider and approve these results on both a standalone and consolidated basis. This anticipation is further fueled by improved stock market conditions, with easing geopolitical risks contributing to a more favorable trading environment.
Analyst Projections for Zee's Performance
According to Nuvama Institutional Equities, Zee's revenue is expected to increase by 14.5% year-on-year to ₹23 billion. This growth is largely attributed to a fivefold surge in 'Other Sales and Services', driven by the distribution rights for popular films such as Kantara and Akhanda (Telugu). However, the firm also anticipates a 30% year-on-year rise in programming costs, while subscription revenue is projected to maintain its momentum with a 7% increase.
Nuvama highlighted that Zee5 is likely to report robust growth in both advertising and subscription revenues. Despite this, ad revenue is forecasted to decline by 8% year-on-year, marking the seventh consecutive quarter of decrease. This downturn is primarily due to slower advertising spending by FMCG companies. Consequently, EBITDA is expected to dip by 19% year-on-year, with margins contracting to 11.5%, influenced by higher costs associated with film distribution.
Kotak's Insights on Revenue and Margins
Kotak Institutional Equities provided a similar outlook, noting some improvement in Zee's advertising environment during Q3, though it remains below normal levels due to trade disruptions from GST rate rationalization in the FMCG sector. The firm expects ad revenues to decline by 7% year-on-year, an improvement from the 11% drop in Q2, while subscription revenue growth could accelerate to 8%, supported by Zee5 language packs.
Kotak estimates other operating revenues at ₹3.75 billion, including pan-India distribution income from Kantara. However, EBITDA is projected to decline by 20% year-on-year to ₹2.5 billion, with margins compressing by 505 basis points to 11%. This pressure stems from factors such as the advancement of ILT20, an inferior revenue mix from Kantara, and adverse operating leverage. Additionally, PBT and recurring PAT are estimated to fall by 19% and 31% year-on-year, respectively.
Overall, while Zee Entertainment's stock shows signs of recovery ahead of its Q3 results, analyst forecasts indicate a mixed performance with strong revenue growth offset by margin challenges and ongoing advertising headwinds.
