Zee plans to cut costs, reduce overlaps after merger with Sony collapses
Zee Entertainment Enterprises Ltd is charting a three-pronged approach – cutting costs, reducing overlaps between businesses, and enhancing quality to regain margins – after its merger with Sony Pictures Entertainment collapsed, managing director and CEO Punit Goenka said in an earnings call on Tuesday. “Going forward, there will be a sharper emphasis on frugality, with a crystal-clear focus on quality and output. Across verticals – including technology, content and marketing – we are implementing steps to optimise spends and enhance the return on investments.
A sound recalibration of the OTT cost structure will be an integral part of this process," Goenka said. The company also aims to improve synergies and reduce overlaps between businesses, he added. “On the revenue side, we will take steps to increase value delivery to our advertisers, apart from exploring alternative content monetisation avenues.
This also includes leveraging the strength and reach of our platforms," Goenka said. He emphasised that a gradual recovery in margins was expected to reflect in earnings from the second half of FY25 and Zee was targeting 18% to 20% EBITDA margin by FY26. On Tuesday the company said its net profit dipped by 6.4% to ₹53.4 crore in the third quarter of FY24 from ₹57 crore in the same period a year ago.
Operating revenue stood at ₹2,045.7 crore, compared to ₹2,108.8 crore a year ago. Domestic ad revenues came in at ₹986.7 crore, up by 4.9% quarter-on-quarter, but down 2.7% year-on-year. Domestic ad revenue was boosted by cricket during the third quarter and while the period saw a seasonal uptick, the recovery in advertising continues to be slow, the company said.
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