Shares of Zee Entertainment Enterprises declined over 5% in early trade on Wednesday, May 20, after the company reported its fourth quarter earnings, with investors reacting to weakness in advertising revenue and pressure on core business profitability.
The stock fell 5.3% to Rs 83 apiece in early trade. Zee Entertainment shares have declined 8.3% so far this year.
The company said its advertising revenue was impacted in March due to the West Asia crisis. Core business profitability also remained under pressure during the quarter.
Zee Entertainment’s change in movie rights amortisation policy affected its EBITDA performance for the fourth quarter. The company revised its management estimates for consuming premiere movie nights to reflect evolving monetisation and digital consumption patterns across platforms, leading to accelerated amortisation of Rs 408.6 crore.
After adjusting for the same, EBITDA declined 51% year on year to Rs 139.8 crore.
However, Zee5 continued to show improvement, reporting its second consecutive quarter of EBITDA profitability. Revenue from Zee5 increased 71% from the corresponding period last year.
The company also recorded a current tax inclusion credit of Rs 97 crore, written off on Margo investment in FY26, which is now a wholly owned subsidiary. This helped cushion the impact on profit after tax.
CLSA maintained its “outperform” rating on Zee Entertainment with a price target of Rs 125 per share. The brokerage cut its FY27 and FY28 earnings estimates by up to 18% but remained positive on the stock due to strong viewership and healthy cash balance.
Among 16 analysts covering the stock, 10 have a “buy” rating, two have a “hold” rating and four have a “sell” rating.
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