Zee Entertainment Enterprises posts Q1FY16 results and acquires SARTHAK a leading Odia channel

Zee Entertainment Enterprises (ZEEL) posted its quarterly result today. During the quarter Zee TV ranked third amongst the Hindi General Entertainment Channels. The company's other general entertainment channels viewership also increased in the first quarter of FY16. Its consolidated net sales boosted by 26.99 per cent to Rs 1340 crore in Q1FY16 on yearly basis. ZEEL's total expenditure increased by 37.9 per cent from Rs 746 crore in Q1FY15 to Rs 1029 crore in Q1FY16. The total expenditure of the company increased primarily due to a 51.4 per cent increment in operating costs, a 23.54 per cent increment in employee expense and 20.26 per cent increment in advertisement and publicity expenses during the quarter.

ZEEL's EBITDA increased by just 0.66 per cent to Rs 311.2 crore in Q1FY16 compared to the same period in the previous financial year. The EBITDA margin of the company contracted by 607 basis points to 23.23 per cent in Q1FY16 on yearly basis. Its EBIT increased by 1.65 per cent to Rs 294 crore in Q1FY16 on yearly basis because depreciation expense reduced by 14.1 per cent to Rs 16.81 crore. PBT of the ZEEL boosted by 10.55 per cent to Rs 361 crore in Q1FY16 on yearly basis as other income increased by 74.53 per cent to Rs 68 crore during the quarter. The company posted net profit of Rs 244 crore in Q1FY16 with 15.76 per cent growth on yearly basis. However, its net profit margin contracted by 177 basis points to 18.19 per cent in Q1FY16 compared to the same period in previous fiscal year.

Segment wise, ZEEL earned total revenue 58.21 per cent as a percentage of sales from Advertising segment, a 34.52 per cent as a percentage of sales from subscription segment, and the remaining 7.27 per cent as a percentage of sales from other sales and services in Q1FY16. The company's advertising segment revenue grew by 25.4 per cent to Rs 780 crore in Q1FY16 on yearly basis. During the quarter its domestic subscription revenue rose by 13.6 per cent to Rs 368 crore on yearly basis while international subscription revenue stood at Rs 94.5 crore with 7 per cent growth over last fiscal.

ZEEL's shareholding pattern indicates that FII holdings contracted by 227 basis points to 47.71 per cent and DII holdings expanded by 154 basis points to 3.71 per cent in Q1FY16. The share price of company increased by 2.95 per cent and trading at Rs 376.4 on intraday.

The ZEEL board approved the acquisition of 100 per cent equity stake in Sarthak Entertainment which operates SARTHAK a leading Odia language general entertainment channel. The deal would take place after regulatory approvals. It will buy stakes on cash deal amounting to Rs 115 crore, including Rs 15 crore payable in financial year 2017 and 2018, linked to certain performance milestones of the channel.