CLSA has maintained its outperform rating on Zee Entertainment Enterprises but cut its target price to ₹133 per share from ₹157, following a disappointing Q2FY26 performance that missed estimates across key metrics. The company reported consolidated revenue of ₹19.7 billion, down 2% year-on-year and up 8% sequentially — around 1% below CLSA’s estimate. The decline was led by an 11% year-on-year drop in advertising revenue, although ad sales improved 6% quarter-on-quarter.
With a sharp increase in content costs, Zee’s EBITDA margin contracted by 500 basis points sequentially, while EBITDA fell 54% year-on-year and 36% quarter-on-quarter. Reported profit after tax (PAT) came in at ₹765 million, down 63% year-on-year and 47% sequentially.
CLSA has cut its FY26–28 earnings forecasts to reflect the weak quarter but remains positive on the company’s longer-term prospects. It cited Zee’s growing network viewership, continued ramp-up of its OTT platform ZEE5, and the festive season tailwinds as drivers for potential recovery in ad revenue. The brokerage also highlighted Zee’s strong balance sheet, with cash reserves of ₹21 billion, and noted that the stock is currently trading at an undemanding valuation of 10x price-to-earnings.
Disclaimer: The views and recommendations above are those of CLSA. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.