India's Zee Entertainment reports Q1 profit on subscriber growth
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India's Zee Entertainment Enterprises posted a profit for the first-quarter on Wednesday as the media company saw a rise in its subscribers, sending shares higher by 5%.
Zee is among the biggest players in India's media and entertainment industry, where the likes of Reliance Industries and the Adani Group are expanding their presence.
The broadcaster, which saw a mega deal with Sony's Indian unit fall through earlier in the year, reported a consolidated net profit of 1.18 billion rupees ($14.1 million) for the quarter ended June 30, compared with a loss of 534.2 million rupees a year ago.
"We expect gradual margin improvement to continue through the rest of the year," the company said in a statement.
Subscription revenue, which makes up 46% of the total, increased 9% to 9.87 billion rupees.
Advertising revenue in the reported quarter fell 3%, compared to a drop of 4% in the year-ago period. Margins rose to 13% from 8% last year.
Some analysts saw this as a sign of turnaround from Zee's recent struggles with dipping advertising revenue and two failed deals, including the $10 billion merger with Sony's India unit, which have battered its shares and financials.
"The results show a bright future for Zee in the near-to-medium term and also show management's clear intent for getting margins back to historic levels of 20%," said Karan Taurani, an analyst at Elara Capital.
Zee's shares have fallen 34% since the Sony deal collapsed.
The firm has cut jobs to trim costs and is working on reducing losses in some businesses, with the aim to double its margins by 2026.
($1 = 83.7000 Indian rupees)
