Zee expects stronger H2 on FMCG uptick and ratings gains despite softer Q2

New Delhi: Zee Entertainment Enterprises (ZEEL) said it expects a better second half on the back of improving FMCG sentiment and recent viewership gains, even as Q2 FY26 profit and advertising softened due to upfront programming and promotional spends. “Investing for the future often requires consistent action and making some tough choices… One of the most significant results is the continued improvement in our digital business,” Managing Director and CEO Punit Goenka told analysts.

ZEEL reported a profit after tax of Rs 76.5 crore for Q2 FY26, down from Rs 209.4 crore a year ago. Operating revenue stood at Rs 1,995.6 crore (down 2% YoY, up 8% QoQ), comprising Rs 806.3 crore advertising, Rs 1,023.0 crore subscription, and Rs 139.9 crore other sales and services. 

The company cited a 12% YoY decline in domestic advertising amid a cautious market. It stepped up marketing to back launches, with advertising and promotion at Rs 369.1 crore, operating costs at Rs 1,078.0 crore, personnel costs at Rs 214.2 crore, and other expenses at Rs 161.5 crore. 

For H1 FY26, operating revenue was Rs 3,794.0 crore, EBITDA Rs 374.4 crore (9.9% margin) and PAT Rs 220.2 crore. The international business contributed Rs 51.0 crore in advertising, Rs 91.9 crore in subscriptions, and Rs 14.4 crore in other sales and services in Q2.

Goenka said costs should stabilise in H2, adding that an early festive season and “higher spends by FMCG” are building a positive trend; management remains “cautiously optimistic” on mid-term ad growth.

Management highlighted an 18.2% network share in July and leadership across seven channels, attributing this to refreshed shows and non-fiction IPs. Two channels were relaunched in Kannada and Bangla, and a daily non-fiction format rolled out during the quarter. “We are strengthening our position across language markets,” Goenka said.

Zee reiterated that viewership gains take 13–16 weeks to flow into yields and said it is working with agencies to compress this lag during the festive window. “We are rebuilding yields and inventory consumption from a subdued base,” the management added.

ZEE5 revenue crossed Rs 300 crore in Q2 (up 32% YoY), while EBITDA loss fell over 80% to Rs 31.2 crore, aided by seven language-tailored packs and a tighter cost slate. Goenka said, “Our strategic approach focused on the performance and profitability of ZEE5 is yielding considerable results… We remain committed to achieving profitability in this segment in the quarters to come.”

On the call, management added that digital costs remain controlled despite a higher number of launches, supporting ongoing margin improvement in the segment.

Zee acknowledged that its start-of-year aspiration for 6–8% ad growth will be difficult after a soft first half but maintained that FY26 will be back-ended as initiatives scale and macro support improves. “We are hopeful for the second half… there are policy-related macro factors, including the GST benefit, that should flow through in the next couple of months,” management said, while refraining from numeric margin guidance. Operating leverage and stabilising costs should aid margin improvement.

On cash flows, the company said ad receivables are steady through the year, while subscription collections are lumpy and typically rise in Q3–Q4, which should support operating cash in the coming quarters.

Zee said it has partnered with IdeaBuzz Tech Pvt Ltd for IdeaBuzz, a short-form content format launched at the NSE, leveraging the network’s linear and digital reach to support the start-up ecosystem. Separately, corporate disclosures indicate Zee will invest Rs 15 crore for a 20% fully-diluted stake in Ideabaaz Tech.

In total, the Zee management expects H2 to improve as festive-season momentum, FMCG recovery and recent ratings gains translate into ad yields and operating leverage.