Zee Entertainment Enterprises Ltd (ZEEL) delivered revenue growth in the July–September quarter of FY27, supported by strong digital performance and FIFA World Cup viewership. However, higher sports-related investments and marketing expenses weighed on profitability.
The company reported a 13% year-on-year increase in operating revenue. EBITDA stood at ₹70.8 crore, translating into a margin of 3.2%, while profit after tax (PAT) reached ₹45.6 crore.
During the earnings call, CEO Punit Goenka described the quarter as a period of growth. He also urged investors to assess the company’s sports investments with a long-term perspective rather than focusing only on their immediate financial impact.
Zee5 Drives Digital Revenue Growth
Zee5 emerged as a major growth contributor during the quarter. Its digital revenue more than doubled compared with the previous year and increased 37% sequentially to ₹630 crore. This marked the platform’s highest-ever quarterly revenue.
Despite significant marketing expenditure, the digital business generated EBITDA of ₹41.6 crore. Deputy CEO and CFO Mukund Galgali said the segment continues to demonstrate healthy unit economics and expects its growth momentum to continue in the second half of FY27.
The FIFA World Cup also delivered impressive audience numbers. Tournament reach increased approximately 41% compared with the previous edition, while combined viewership across platforms exceeded 400 million. Around 83% of FIFA viewing took place live on Zee5.
Zee holds FIFA broadcasting rights until 2034. Additionally, it secured five-year Indian broadcasting agreements for Germany’s Bundesliga and Italy’s Serie A.
During Q2, Zee5 released 34 shows and films, including nine original productions. The company also upgraded its mobile and connected-TV applications with AI-powered content discovery and improved personalisation features.
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FIFA Subscribers: Will They Continue After the Tournament?
One of the biggest questions for investors is whether World Cup viewers will remain paying subscribers after the competition ends.
Zee’s subscription revenue increased 30% year on year, supported by higher subscription prices, improved revenue per user and subscriber additions across digital and television platforms.
According to Galgali, approximately 35–40% of subscribers who joined during the FIFA tournament have renewed their subscriptions. However, most World Cup packages were quarterly rather than annual, meaning some of the additional revenue could gradually decline.
Management acknowledged that subscription growth may not remain at 30%. Nevertheless, it expects a stronger growth rate in the second half of FY27 compared with earlier periods.
Zee did not reveal the exact revenue generated by FIFA, although management described the contribution as healthy. Most of the tournament-related earnings came from subscriptions. Since live football offers limited advertising opportunities, the company expects a greater advertising benefit from its sports channels next year, when distribution agreements come up for renewal.
Advertising Revenue Shows Signs of Stability
Zee’s advertising revenue remained broadly unchanged year on year. However, the performance indicates some stability despite challenging market conditions.
The festive season shifted into the December quarter this year. Still, FIFA coverage and popular television programme Sa Re Ga Ma Pa helped maintain advertising demand.
On a sequential basis, advertising revenue increased 20%. Management attributed the improvement partly to easing geopolitical tensions in the Middle East and a gradual return of advertiser confidence.
Goenka said the decline in advertising revenue had stabilised despite elevated inflation and weak monsoon conditions affecting consumer spending.
Zee Entertainment Share of the linear television network market reached 20% in week 24, its strongest level in seven years, based on the latest available industry ratings before measurement was suspended. The company’s monthly reach across television genres has also crossed 800 million.
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Higher Operating Costs Put Pressure on Margins
Despite revenue growth, Zee faced pressure on profitability as operating expenses increased 18% year on year.
Higher spending on FIFA broadcasting rights, advertising and promotional activities contributed to the increase. The company is also investing in emerging business areas, including children’s programming, live entertainment, animation and short-format micro dramas.
Through its Bullet platform, Zee is expanding its micro-drama business and has introduced an AI-based filmmaking tool for creators and production studios.
Galgali indicated that excluding investments in newer business initiatives, the company’s EBITDA margin would have been in the mid-to-high single-digit range. Investors will likely monitor whether these investments generate stronger returns in the coming quarters.
Zee Studios Faces a Slower Quarter, While Music Business Remains Strong
Zee Studios experienced a relatively quiet quarter, releasing six films. One was in Hindi, while the remaining five were in regional languages.
Revenue from other sales and services declined 36% year on year, partly due to a large syndication transaction in the corresponding period last year. However, the studio acquired international distribution rights for Drishyam 3, which was released in Q3.
Meanwhile, Zee Music Company continued to record strong digital engagement. Its music catalogue generated more than 59 billion video views, and its YouTube channel crossed 179 million subscribers.
Although the music business remains profitable, the company has not provided a firm timeline for separate segment disclosures or a potential value-unlocking exercise. Goenka said Zee is working towards improving reporting across several business verticals.
Cash Position and Management’s FY27 Outlook
Zee’s financial position received support from a ₹740 crore initial investment by promoters through preferential warrants following shareholder approval.
As of September 30, 2026, the company held ₹2,570 crore in cash and treasury investments.
Galgali explained that payments towards foreign currency convertible bonds (FCCBs) and the dividend payout affected cash levels during the quarter, rather than delays in collecting receivables.
Looking ahead, management remains cautiously optimistic about the rest of FY27. The company expects the festive season, upcoming content releases and continued digital expansion to support revenue and profitability.
What Investors Should Watch Next
Zee Entertainment’s Q2 FY27 performance highlights the growth potential of its digital and sports businesses. The FIFA World Cup helped Zee5 attract a wider audience and achieve record quarterly digital revenue.
However, the next challenge will be converting temporary tournament viewers into long-term subscribers while controlling content, marketing and broadcasting costs.
For investors, the key indicators to watch will be subscriber retention, advertising recovery, digital profitability and the returns generated by Zee’s new business investments.
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