Zee Entertainment falls 6% on weak Q4; analysts flag ad revenue concerns

Elara Capital downgraded Zee Entertainment Enterprises to Sell, while Motilal Oswal Financial Services retained Neutral amid weak ad demand and rising digital competition

Shares of Zee Entertainment Enterprises came under pressure on Wednesday’s trading session after the company reported a weak performance for the fourth quarter of financial year 2025-26 (Q4FY26). Zee Entertainment’s share price declined 5.73 per cent to hit an intraday low of ₹82.65 per share on the NSE.  At 10:10 AM, the counter was trading at ₹82.56 apiece, down 5.34 per cent from its previous close.

 

Analysts, meanwhile, turned cautious on Zee Entertainment Enterprises following its Q4FY26 results, citing weak advertising revenue, deteriorating profitability, rising competitive intensity, and continued pressure from the structural shift towards digital platforms.

Zee Entertainment Q4 results, dividend announcement

During Q4FY26, Zee Entertainment reported a consolidated net loss of ₹102 crore, compared with a net profit of ₹188.4 crore in the corresponding quarter of the previous fiscal year. Revenue from operations declined 7.3 per cent Year-on-Year (Y-o-Y) to ₹2,024.8 crore from ₹2,184.1 crore.

 

 

The company reported an earnings before interest, taxes, depreciation and amortisation (Ebitda) loss of ₹254.8 crore during the quarter under review, against an Ebitda of ₹297.7 crore in the year-ago period.

 

Further, the company’s board recommended a final dividend of ₹2 per equity share for FY26.

Meanwhile, here’s what brokerages said on Zee post Q4 results

Elara Capital: Sell | Target price: ₹80

Analysts at Elara Capital downgraded Zee Entertainment to ‘Sell’ from ‘Buy’, while slashing the target price to ₹80 from ₹140, based on 12x FY28E consolidated P/E. They noted that the stock trades at around 13x FY28E consolidated P/E, offering limited valuation comfort.

 

Elara Capital analysts led by Karan Taurani said the downgrade was driven primarily by a sharp deterioration in profitability and the first-ever Ebitda loss since FY07, alongside weakening visibility on management’s earlier mid-teen margin guidance.

 

“Continued structural challenges across the TV broadcasting ecosystem, persistent advertising weakness, elevated competitive intensity further exacerbated by industry consolidation following the Reliance and Disney merger, and macro concerns (including geopolitical tensions in West Asia) further constrain earnings recovery visibility. Thus, we pare down our FY27E/28E revenue estimates by 6 per cent/7 per cent and PAT estimates by 23 per cent/14 per cent, respectively, led by weaker ad revenue assumptions and higher content charges,” wrote the analysts in a research note.

MOFSL: Neutral | Target price: ₹80

Analysts at MOFSL retained a ‘Neutral’ rating on Zee Entertainment with a target price of ₹80, premised on 12x FY28E P/E. Aditya Bansal, Avinash Karumanchi, Siddhesh Chaudhar and Niraj Harwande of MOFSL said Zee’s inexpensive valuations remain the only reason behind their neutral stance, as the stock trades at below 5x FY28E EV/Ebitda, with a cash balance of ₹2,700 crore.

 

The slowdown in FMCG advertising spends on linear platforms, they said, continues to weigh on Zee’s domestic advertising revenue, which has declined around 37 per cent over FY19-26.

 

The analysts believe a sustainable recovery in advertising revenue remains key to any potential re-rating in Zee’s multiples. They further cut their FY27-28E Ebitda estimates by 11-13 per cent and adjusted PAT estimates by 5-6 per cent, driven by persistent weakness in ad revenue and higher expenses.

 

“Despite a continued trend of decline in advertising revenue for the past several years, we have built in 3.5 per cent CAGR in ad revenue over FY26-28E, which has downside risks from the structural shift in ad spending to the digital medium. We model a CAGR of 4 per cent in revenue over FY26-28E, while we expect FY28E Ebitda/PAT to decline 24 per cent/17 per cent from FY25 levels,” said the MOFSL analysts in a research note.    ============================ 

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