'Purse strings will be tightened': Zee's Punit Goenka hints at layoffs after Sony snub
While Goenka’s plan included recalibration of cost structure for businesses such as OTT or the implementation of content and tech strategies to drive revenues, certain outputs of the firm will also need to be curtailed to improve revenues and margins.
- Feb 14, 2024,
- Updated Feb 14, 2024 7:16 AM IST
At an investors' call, Zee Entertainment Managing Director Punit Goenka said the firm planned to put in place a 'frugal approach' for an 18 to 20 per cent EBITDA margin with 8-10 per cent CAGR revenue growth.
This, he said, will include "cutting spends, reducing the number of new content properties, and a complete re-evaluation of the firm's sports portfolio".
"Tightening our belt on manpower will be part of the plan going forward as we talk about frugality," Goenka said. "I am not saying that there's going to be large levels of layoffs, but we will have to see which are the overlaps," he added.
“Over the last three decades, Zee has been recognised for its fiscal prudence across the industry, and going forward, there will be a sharper emphasis on frugality, with a crystal-clear focus on quality and output,” he added.
Goenka, however, steered clear from queries related to the failed merger with Sony, citing the matter to be sub-judice.
While Goenka’s plan included recalibration of cost structure for businesses like OTT or the implementation of content and tech strategies to drive revenues certain outputs of the firm will also need to be curtailed in the attempt to improve revenues and margins. The company reported a 140 percent increase in profit at Rs 58.5 crore in the December quarter of FY24 up from Rs 24.32 crore during the same period a year ago.
"In Q3FY24, overall operating costs declined by 12.8 percent quarter-on-quarter (QoQ) due to lower content costs, fewer movie releases and continuous cost optimization in Zee5. Given our business has high operating leverage, despite effective cost management, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins has declined to 10.2 percent. Net profit for the quarter and year was impacted by merger expenses related exceptional items which came to about Rs 60.3 crore during the quarter," said Chief Financial Officer (CFO) Rohit Gupta.
At an investors' call, Zee Entertainment Managing Director Punit Goenka said the firm planned to put in place a 'frugal approach' for an 18 to 20 per cent EBITDA margin with 8-10 per cent CAGR revenue growth.
This, he said, will include "cutting spends, reducing the number of new content properties, and a complete re-evaluation of the firm's sports portfolio".
"Tightening our belt on manpower will be part of the plan going forward as we talk about frugality," Goenka said. "I am not saying that there's going to be large levels of layoffs, but we will have to see which are the overlaps," he added.
“Over the last three decades, Zee has been recognised for its fiscal prudence across the industry, and going forward, there will be a sharper emphasis on frugality, with a crystal-clear focus on quality and output,” he added.
Goenka, however, steered clear from queries related to the failed merger with Sony, citing the matter to be sub-judice.
While Goenka’s plan included recalibration of cost structure for businesses like OTT or the implementation of content and tech strategies to drive revenues certain outputs of the firm will also need to be curtailed in the attempt to improve revenues and margins. The company reported a 140 percent increase in profit at Rs 58.5 crore in the December quarter of FY24 up from Rs 24.32 crore during the same period a year ago.
"In Q3FY24, overall operating costs declined by 12.8 percent quarter-on-quarter (QoQ) due to lower content costs, fewer movie releases and continuous cost optimization in Zee5. Given our business has high operating leverage, despite effective cost management, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins has declined to 10.2 percent. Net profit for the quarter and year was impacted by merger expenses related exceptional items which came to about Rs 60.3 crore during the quarter," said Chief Financial Officer (CFO) Rohit Gupta.