Zee Entertainment: More GST pain likely in Q2

Advertising revenue growth below estimates in quarter as advertisers cut spends due to GST uncertain

Zee Entertainment posted numbers in line with analysts’ expectations for the June quarter (Q1), both on the revenue and operating profit fronts. Revenues at Rs 1,540 crore fell 2 per cent year-on-year (y-o-y). But the financials were impacted by the sale of Ten Sports and acquisition of two channels from Reliance Broadcast Network (RBNL). 

Having said that, the two key parts of top line are advertising (70 per cent of revenues) and subscriptions (the rest). Adjusted advertising revenues were up just 6.9 per cent y-o-y to Rs 869 crore, and came below analysts’ expectations of 9-10 per cent growth, mainly