Zee Entertainment Enterprises Ltd is planning a three-pronged approach after its merger with Sony Pictures Entertainment collapsed. The approach includes cutting costs, reducing overlaps between businesses, and enhancing quality to regain margins. Punit Goenka, the managing director and CEO of Zee, shared this news during an earnings call on Tuesday.
According to Goenka, the company is emphasizing frugality, focusing on quality and output, and implementing steps to optimize spends and enhance the return on investments across various verticals. A sound recalibration of the OTT cost structure will also be a part of this process. The company also aims to improve synergies and reduce overlaps between businesses.
In addition to cost-cutting measures, Zee is also looking to increase value delivery to its advertisers and exploring alternative content monetization avenues to grow its revenue streams. The company is targeting an 18% to 20% EBITDA margin by fiscal year 2026.
The company reported a 6.4% dip in net profit to ₹53.4 crore in the third quarter of FY24, compared to ₹57 crore in the same period a year ago. Operating revenue also decreased to ₹2,045.7 crore from ₹2,108.8 crore a year ago. Despite a seasonal uptick and a boost from cricket, domestic ad revenue was down 2.7% year-on-year while revenue from other sales and services dropped 36% due to fewer movie releases.
The collapse of the merger between Sony and Zee Entertainment was formalized on 22 January. The termination came after months of debate on the appointment of a chief executive for the merged entity. The decision was a result of disagreements between the two companies’ leadership regarding the appointment of the CEO.
While Zee Entertainment is focused on improving its margins and operational efficiency, it also faces the challenge of rebuilding investor confidence and navigating the aftermath of the failed merger. The company’s stock closed at ₹189.50 on Tuesday.
The company will need to implement its cost-cutting and quality enhancement measures effectively to achieve its financial targets in the coming years.
