ZEEL’s Share Price Sees Marginal Gain on December 2, 2024

The share price of Zee Entertainment Enterprises Ltd (ZEEL) saw a slight uptick on Monday, December 2, 2024, trading 0.50% higher at ₹130. Despite opening at ₹130 on the NSE and hitting an intraday high of ₹131.50, the stock retreated to its opening level.

Share price is down over 50% in CY2024, ZEEL has significantly underperformed frontline indices this year.

Steady Margin Improvement

In Q4 FY24, ZEEL’s EBITDA margins were at 9.7%. Within just two quarters, these margins have seen a robust improvement of 630 basis points, rising to 16.0% in Q2 FY25. This impressive turnaround stems from bottom-up interventions across cost structures and business segments.

The company has also made significant strides in its digital segment, ZEE5. Quarterly EBITDA losses for ZEE5 have narrowed from ₹265 crore in Q4 FY24 to ₹159 crore in Q2 FY25, signalling progress in profitability for this strategic segment.

Cash Position Strengthens Amid Operational Optimisation

ZEEL’s efficient working capital management and optimised content acquisition strategies have led to a significant improvement in its cash position. As of September 30, 2024, its liquidity, including ₹2 billion from Foreign Currency Convertible Bonds (FCCB), stood at ₹17.8 billion—more than double the ₹8.3 billion reported on December 31, 2023.

Additionally, the company’s content inventory and advances have declined by ₹5.1 billion during the same period, reflecting better operational efficiency. This improved liquidity and access to growth capital position ZEEL to seize emerging opportunities in the evolving media landscape.

Challenges Ahead Despite Progress

Despite these operational improvements, ZEEL’s share price remains under pressure, with a decline of over 50% in CY2024. The underperformance underscores the challenges the company faces, including macroeconomic uncertainties and stiff competition. However, its improving profitability, strategic focus on digital, and strengthened financial position provide a foundation for recovery.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.