The company said domestic advertising revenue for the quarter grew by 7.5 per cent YoY and 43.6 per cent quarter on quarter (QoQ); a sharp recovery post April-September period (H1FY21) reflects the rebound in consumer demand and spending. Ebitda, grew 26.5 per cent YoY to Rs 716 crore, with margins at 26.2 per cent, down 140 basis points (bps) on YoY basis.
"While revenue recovery has been encouraging, high investments in content acquisition in the recent past, acceleration in low-margin movie production, and investments in the Digital platform are likely to keep margins contained at 27 per cent in FY22, much lower than 32–34 per cent historically. On the positive side, it has remained committed to bringing in increased governance and transparency toward investments, although the cleanup is still in process," analysts at MOFSL said.
Any potential re-rating would be governed by a consistent and disciplined investment approach – restricted to the non-core business – and an improving Ebitda/free cash flow (FCF) profile, the brokerage firm added while maintaining 'Neutral' rating on the stock.
Those at ICICI Securities, meanwhile, said ZEE reported a good set of results for Q3FY21. "Domestic ad grew 7.5 per cent YoY while domestic subscription increased 9.3 per cent YoY on like to like basis ahead of expectations. Ad revenue saw strong pick up sequentially owing to festivities and ad pricing reached near normal. However, with high investment proposed in content from FY22 onwards, operating margins and cash flows could remain lower," it added.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.