MUMBAI: Zee Entertainment Enterprises Ltd (Zeel) deputy CEO & CFO Mukund Galgali had plenty of good news to share on the company’s third-quarter earnings call on 22 January. After years of burning through cash faster than a Hindi cinema villain through cigarettes, the company’s digital business has finally turned a profit. “This marks the first quarter in which our digital business has delivered a positive Ebitda,” he told investors, announcing earnings of Rs 564 million compared to a loss of Rs 1,362 million in the same period last year.

The digital division’s revenue surged 73 per cent year-on-year to Rs 4,180 million—”our highest quarterly revenue so far in the digital business,” Galgali noted. The company released 39 shows and movies including 11 original series during the quarter, and a revised pricing strategy on its Z5 platform, coupled with syndication revenues and a new telco deal, drove the turnaround.

Galgali said the company remains “confident of improving our unit economics in this business in the medium term and drive sustained returns on our investments.”

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But whilst the digital arm is finally paying its way, the traditional television business tells a more subdued story. Advertising revenue fell nine per cent year-on-year, though it managed a six per cent bump quarter-on-quarter. “We continue to observe a gradual and sequential pickup in the ad spends by advertisers,” Galgali said, though he admitted the decline was “largely led by softness in FMCG spending.” The GST cuts haven’t unleashed the expected advertising bonanza. “We are yet to see the full benefits of GST cut and a sustained pickup in FMCG advertising spends towards brand building,” he confessed.

Still, Zee’s broadcast network isn’t on life support. Galgali pointed out that with weekly impressions above 28 billion and weekly reach exceeding 730 million, the company continues to maintain its position as “India’s strong number two TV entertainment network.”

The viewership share gained 60 basis points year-on-year to 17.5 per cent. Regional channels are performing particularly well: Zee Bangla regained its leadership position, and “Zee remained the fastest growing network in the south with a share of 17.7 per cent,” Galgali said. In Maharashtra, Zee Marathi commands a 33.6 per cent market share. “This reaffirms that the strategic initiatives we have implemented over the last few quarters are delivering results in the right direction.”

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The company has also been dabbling in new ventures. Galgali highlighted the microdrama app Bullet, which “continues to garner steady gains with its unique model of gamifying the viewing experience,” and the launch of Kidz on Z5 in late November “in order to further tap into the younger consumer base.” The music business, meanwhile, garnered over 51 billion total video views with more than 175 million subscribers on YouTube.

When analyst Kavish Parekh from BNK Securities pressed for fiscal 2027 guidance, Galgali demurred. “Slightly early if we were to kind of look at FY27,” he said, though he added: “we remain still optimistic certainly for FY27 outlook.” On margins, he was equally cagey—”slightly early,” he repeated—but insisted that “our endeavour is to improve margins from where we will end in FY26.”
Overall, Zee’ls EBITDA margin improved 310 basis points quarter-on-quarter to 10.5 per cent, whilst profit after tax doubled sequentially to Rs 15.48 million. The company is sitting on Rs 21.8 billion in cash and liquid investments. Galgali wrapped up by emphasising the company’s “focused efforts to strengthen our liquidity and financial position.”

The real test lies ahead. Can Zee sustain its digital profitability whilst nursing its advertising business back to health? For now, management is playing it safe with forecasts. But if the third quarter is any indication, the entertainment giant may finally be learning to dance in two worlds at once—without tripping over its own feet.

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