Zee September-quarter profit falls 40% as expenses rise

Zee Entertainment Enterprises Limited reported consolidated profit of Rs 45.6 crore for the quarter ended 30 September 2026, down 40% from Rs 76.5 crore a year earlier. Zee’s subscription revenue rose by Rs 309.4 crore, but total expenses increased by Rs 303.8 crore, led by operational and advertising-and-publicity costs.

Why did Zee's September-quarter profit fall?

Zee’s September-quarter profit fell because expense growth exceeded the rise in total income. Consolidated total income increased 12.6% year on year to Rs 2,247.2 crore in the quarter ended 30 September 2026, from Rs 1,995.6 crore in the corresponding quarter of 2025. Total expenses rose 16.2% to Rs 2,184.1 crore from Rs 1,880.3 crore, reducing profit before tax to Rs 63.1 crore from Rs 115.4 crore.

Profit for the period was Rs 45.6 crore, compared with Rs 76.5 crore a year earlier, while profit attributable to Zee shareholders was Rs 47.8 crore against Rs 76.5 crore. The difference reflected a Rs 2.2 crore loss attributed to non-controlling interests in the September 2026 quarter. Basic and diluted earnings per share, which are not annualised for the quarter, were Rs 0.50 each, down from Rs 0.79 in September 2025.

The sequential comparison also showed a lower quarterly outcome. Profit for the period was Rs 74.3 crore in the quarter ended 30 June 2026, compared with Rs 45.6 crore in the September quarter. Total expenses rose to Rs 2,184.1 crore from Rs 1,860.4 crore over the two quarters, while total income increased to Rs 2,247.2 crore from Rs 1,938.5 crore.

How did Zee's advertising and subscription revenue change?

Zee’s subscription revenue grew sharply, while advertising revenue was almost unchanged from the prior-year quarter. Subscription revenue rose 30.2% to Rs 1,332.4 crore in the quarter ended 30 September 2026 from Rs 1,023 crore a year earlier. Advertising revenue was Rs 803 crore, marginally below Rs 806.3 crore in the September 2025 quarter.

The revenue mix shifted further towards subscriptions. Subscription revenue exceeded advertising revenue by Rs 529.4 crore in the September 2026 quarter, compared with a Rs 216.7 crore gap a year before. Other sales and services declined to Rs 89.2 crore from Rs 139.9 crore, while other income decreased to Rs 22.6 crore from Rs 26.4 crore.

For the half year ended 30 September 2026, subscription revenue was Rs 2,469.3 crore, up from Rs 2,004.7 crore in the comparable prior-year half. Advertising revenue fell to Rs 1,474.4 crore from Rs 1,564.8 crore over those six-month periods. The Rs 464.6 crore increase in half-year subscription revenue therefore more than offset the Rs 90.4 crore reduction in advertising revenue within reported revenue from operations.

Which costs increased most for Zee during the quarter?

Zee’s largest increases were in operational costs and advertising-and-publicity spending. Operational cost rose to Rs 1,224.7 crore in the September 2026 quarter from Rs 1,078 crore a year earlier, an increase of Rs 146.7 crore. Advertising and publicity expense increased by Rs 201.9 crore to Rs 571 crore from Rs 369.1 crore, the largest increase among the separately reported expense lines.

Employee benefits expense declined by Rs 16.5 crore to Rs 197.7 crore, and depreciation and amortisation fell by Rs 14.3 crore to Rs 42.8 crore. Other expenses were broadly stable at Rs 160.4 crore compared with Rs 161.5 crore. Zee also reported a Rs 15 crore fair-value gain on financial instruments through profit and loss, against a Rs 2.6 crore gain a year earlier, reducing reported expenses.

For the half year ended 30 September 2026, advertising and publicity expense reached Rs 1,017.8 crore, compared with Rs 644.3 crore in the previous year’s half. Operational cost rose to Rs 2,256.8 crore from Rs 2,049 crore. The two lines together increased by Rs 581.3 crore, while total income for the half year increased by Rs 340.3 crore to Rs 4,185.7 crore.

What do Zee's cash flow and balance sheet show?

Zee used Rs 370.6 crore in operating activities during the half year ended 30 September 2026, compared with an outflow of Rs 38.6 crore in the prior-year half. Cash generated from operations turned to an outflow of Rs 352.9 crore from an inflow of Rs 109 crore. The change followed a Rs 399.6 crore increase in trade and other receivables and a Rs 115.4 crore increase in inventories.

Operating profit before working-capital changes was Rs 166.1 crore for the September 2026 half year, down from Rs 404.8 crore a year before. Investing activities used Rs 97.3 crore, compared with Rs 27.1 crore, while financing activities generated Rs 281.6 crore after Zee received Rs 735.5 crore from issuing share warrants. Net cash outflow for the half year was Rs 186.3 crore, compared with Rs 330.7 crore in the previous year’s half.

At 30 September 2026, total assets were Rs 14,678.9 crore, up from Rs 14,215.5 crore at 31 March 2026. Trade receivables rose to Rs 1,912.6 crore from Rs 1,724.3 crore and inventories increased to Rs 6,633.5 crore from Rs 6,512.3 crore. Cash and cash equivalents declined to Rs 607 crore from Rs 797.8 crore, while long-term borrowings fell to Rs 1.9 crore from Rs 176.1 crore.

Conclusion

Zee’s September 2026-quarter results show that subscription growth lifted total income, but the benefit did not translate into higher profit because operational and promotional spending increased more quickly. The 40% fall in consolidated profit to Rs 45.6 crore occurred alongside flat advertising revenue and a half-year operating cash outflow of Rs 370.6 crore.

The next disclosed matter to watch is the Put Option agreement involving ATL Media Limited, Zee’s overseas wholly owned subsidiary. The agreement had been extended to 30 December 2026, although the Supreme Court of Mauritius ruled on 28 February 2025 that the amended agreement was rescinded and void; during the half year, Yes Bank asserted claims against ATL in the High Court of England and Wales, which management said it has grounds to defend.