Zee Q1 - Ebitda Margin Expansion Surprises Positively As Cost-Saving Initiatives Bear Fruit: ICICI Securities

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ICICI Securities Report

In Q1 FY25, Zee Entertainment Enterprises Ltd.’s Ebitda margin expanded 306 basis points QoQ, beating our estimates. This was driven by cost optimisation efforts such as right-sizing its tech team for the OTT offering and reducing marketing costs.

Management believes that most of the cost-driven Ebitda margin improvement is already reflected in Q1 FY25 results. There is still some room for efficiency-driven cost savings in Q2 FY25. Beyond that, it will be driven by operating leverage from revenue uplift.

Management has also guided for ad revenue growth driven by rural recovery from H2 FY25 and inflation-linked growth in subscription revenues.

We believe that Zee is likely to be a key beneficiary of the potential rural demand recovery.

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ICICI Securities ZEE_Q1FY25 Results.pdf

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