News Earnings Zee Entertainment's Digital Business Achieves First Profitable Quarter in Q3 FY26Zee Entertainment's Digital Business Achieves First Profitable Quarter in Q3 FY26
Zee Entertainment Enterprises Limited achieved a historic milestone in Q3 FY26 with its digital business turning profitable for the first time, posting EBITDA of INR 564 million versus a loss of INR 1,362 million in the previous year. Digital revenue surged 73% year-on-year to INR 4,180 million, the highest quarterly performance for the segment. The company maintained its position as India's number 2 TV entertainment network with 17.5% viewership share, while overall EBITDA margin improved 310 basis points quarter-on-quarter to 10.5% and profit after tax grew 2x sequentially to INR 1,548 million.
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Zee Entertainment Enterprises Limited achieved a significant milestone in Q3 FY26 as its digital business turned profitable for the first time, marking a transformative quarter for the media and entertainment company. The digital segment posted EBITDA of INR 564 million compared to a loss of INR 1,362 million in the same quarter last year, driven by strategic content investments and revised pricing strategies.
Digital Business Breakthrough
The company's digital entertainment platform ZEE5 delivered exceptional performance during the quarter, with revenue growing 73% year-on-year to INR 4,180 million - the highest quarterly revenue achieved by the digital business to date. This growth was supported by the release of 39 shows and movies, including 11 original series across 7 languages.
| Digital Business Metrics: | Q3 FY26 | Q3 FY25 | Change |
|---|---|---|---|
| Revenue: | INR 4,180 million | - | +73% YoY |
| EBITDA: | INR 564 million | (INR 1,362 million) | Positive |
| Content Releases: | 39 shows/movies | - | 11 originals |
The revenue growth was aided by syndication revenues and a revised pricing agreement with a telecom player during the quarter, along with improved advertising revenues. Deputy CEO and CFO Mukund Galgali noted that the company has reached an annual recurring revenue (ARR) business of north of INR 1,000 crores in ZEE5.
Broadcast Business Performance
Zee Entertainment maintained its strong position in the broadcast segment, holding its place as India's number 2 TV entertainment network. The company gained 60 basis points in viewership share year-on-year, taking its network share to 17.5%. The linear TV landscape remained stable with weekly impressions above 28 billion and weekly reach exceeding 730 million.
| Broadcasting Highlights: | Performance |
|---|---|
| Network Share: | 17.5% (+60 bps YoY) |
| Weekly Impressions: | Above 28 billion |
| Weekly Reach: | Over 730 million |
| South Market Share: | 17.7% (fastest growing) |
| Zee Marathi Share: | 33.6% |
Key regional channels showed strong performance, with Zee Bangla regaining leadership in the East and Zee Marathi achieving a market share of 33.6% in Maharashtra. The company remained the fastest-growing network in the south with a 17.7% share.
Financial Performance and Margins
Overall subscription revenue grew 7% year-on-year, primarily driven by digital business growth and successful contract renewals with broadcast distribution operators. While advertising revenues declined 9% year-on-year due to FMCG spending softness, they showed improvement with 6% quarter-on-quarter growth, indicating gradual recovery.
| Financial Metrics: | Q3 FY26 Performance |
|---|---|
| EBITDA Margin: | 10.5% (+310 bps QoQ) |
| Profit After Tax: | INR 1,548 million (2x sequential growth) |
| Cash & Treasury: | INR 21.8 billion |
| Content Inventory: | INR 69.3 billion (down INR 1.2 billion) |
The company's EBITDA margin improved by 310 basis points quarter-on-quarter to 10.5%, supported by tight cost management and operating leverage. Cash and treasury investments stood at INR 21.8 billion as of December 2025, comprising cash of INR 5.0 billion, fixed deposits of INR 7.0 billion, and liquid mutual fund investments of INR 9.8 billion.
Strategic Initiatives and Content Expansion
During the quarter, Zee Entertainment expanded its content portfolio through strategic acquisitions, including theatrical and satellite rights for Kantara Chapter 1 and Akhanda 2. The company released 8 movies - 1 in Hindi and 7 in regional languages - with 3 own productions and 5 distribution deals. The syndication vertical showed promising results, contributing to a 7x year-on-year growth in other sales and services.
The company launched new strategic initiatives including the micro drama app Bullet and entered the Kids Entertainment segment with KidZ on ZEE5 to tap into younger consumer demographics. The Music business maintained healthy profitability, garnering over 51 billion total video views with more than 175 million YouTube subscribers.
Outlook and Market Position
Looking ahead, Zee Entertainment remains optimistic about gradual advertising recovery, supported by improved network share and continued digital business growth. The company expects benefits from GST cuts and sustained pickup in FMCG advertising spend toward brand-building initiatives. Management emphasized their focus on driving revenue growth through digital business expansion, implementation of strategic initiatives, and leveraging an improved advertising environment while maintaining prudent cost management for enhanced profitability and cash generation.
Historical Stock Returns for Zee Entertainment
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.36% | +2.25% | -5.66% | -27.89% | -20.26% | -65.54% |
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