Zee Entertainment Enterprises (Z IN) – Q1FY27 Result Update – Weak ad-environment dents margins – Upgrade to ‘BUY’
Published on 11 Aug 2026
Z IN reported weak operational performance with EBITDA margin of 4.1% (PLe 2.2%) primarily due to an adverse advertising environment, higher programming cost on account of acquisition of FIFA rights and elevated A&P spends arising from launch of new sports channels. Nonetheless, we expect margin recovery from 2HFY27E, supported by improving viewership share (peaked at 20% in week 24 during the quarter) and increased traction in digital business (revenue up 57.6% YoY). Accordingly, we expect EBITDA margins to improve to 8.9%/13.7% in FY27E/FY28E, respectively. Led by improving viewership share, rising profitability in digital business and expected recovery in ad-environment we upgrade Z IN to BUY (earlier ACCUMULATE) with a TP of INR116 (13xFY28E EPS; no change in target multiple). We have not incorporated the dilution impact arising from preferential allotment of INR31,435mn to promoters (shareholder approval has been received) given the SEBI ruling.
