Shares of Zee Entertainment were up in early trade on Thursday after the company’s first-quarter profit numbers came in line with analyst estimates while revenue figures beat expectations.
What Happened: The company faced a steep decline in profit after tax by 97% in the June quarter to just ₹3.9 crore. This stark drop from ₹130.1 crore profit after tax posted last year was attributed to a sluggish advertising environment. The profit numbers were mostly in line with analyst expectations.
Domestic advertising revenue experienced a 2.6% year-on-year dip, reaching ₹901.8 crore. This was a smaller fall than the 7% dip analysts had expected.
The company said these subdued advertising figures were influenced by the Indian Premier League (IPL), which was slated for first two months of the quarter, and ad spending started picking up towards the quarter’s end, largely driven by the fast-moving consumer goods sector.
Despite the challenges, subscription revenues stayed strong, surging 18% to ₹907.5 crore. This beat an estimated 2-3% growth predicted by analysts. Subscriptions benefited from the new tariff order (NTO) 3.0 and ZEE5’s streaming platform, the company said in a statement.
Zee5’s overall revenue jumped 21% to ₹193.9 crore in the June quarter, with the firm releasing 32 shows and movies.
The company’s planned merger with Sony’s India unit will also be in focus as the country’s company law tribunal delivers its verdict on the matter on Thursday.
Price Action: Zee Entertainment’s share price climbed 1.4% to ₹245.65 at market open on Thursday.
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