Stocks

Zee News rides on improved advertising

Our Bureau | Updated on November 14, 2017 Published on January 25, 2011

Revenue expansion taking place





Zee News has returned to fairly sound levels of profitability in the recent December quarter.

Riding on the fortunes of its strongest channels, the company has managed to garner a substantial growth in advertising revenues. It also helped that the period was dotted with a considerable number of festival days, thus aiding viewership and advertising inflows.

For the quarter, the company saw revenues grow by 20.7 per cent sequentially to Rs 74.4 crore, while net profits rose from insignificant levels to Rs 10.4 crore.

Zee News has acquitted itself fairly well given that some of its best regional entertainment channels were carved out last fiscal and merged with Zee Entertainment as a part of the latter's restructuring. What is more desirable for the company is that the revenue expansion is taking place due to the increasing contribution from advertising.

Revenues from advertising have grown steadily in this fiscal and now account for 72.8 per cent of the overall kitty, up 3 percentage points from the first quarter. Sequentially, advertising revenues are up 32.9 per cent as spends revolving around festivities were robust.

Zee News, the flagship channel, continues to do well in garnering viewership and television rating points and is well positioned in key metros.

Zee Business is well placed in the Hindi business news segment, with just two dominant players. Its other news channel in Bengali — 24 Ghanta — too is reportedly garnering higher interest from audience.

The challenge for the company, however, would be to drive growth in Zee Tamil, Zee News UP and 24 Ghantalu, which continue to make losses. The markets in which these channels feature are dominated by one or two incumbent players and hence the task of greater penetration may be a stiff task.

To be able to sustain advertising momentum outside the festive season could also not prove that easy.

Despite these factors, it might be worthy to note that the company remains one of the few news-focussed channels in the listed space that is running profitably.

The stock reacted positively to the results and was up over 7 per cent in Thursday's trade.

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Published on January 25, 2011
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