ZEEL shares fall 4% post Q2 earnings; JM Financial retains 'Buy', sees 62% upside potential
Brokerage JM Financial maintained its 'Buy' rating on the stock, projecting a 12-month target price of Rs 170, which implies an upside potential of 61.75 per cent from current levels.
- Oct 17, 2025,
- Updated Oct 17, 2025 12:06 PM IST
Shares of Zee Entertainment Enterprises Ltd (ZEEL) slipped nearly 4 per cent in Friday's trade after the company reported a miss on profitability in its July–September quarter (Q2 FY26) results. The stock declined 3.89 per cent to a day low of Rs 105.10.
Brokerage JM Financial maintained its 'Buy' rating on the stock, projecting a 12-month target price of Rs 170, which implies an upside potential of 61.75 per cent from current levels.
"ZEEL delivered an in-line quarter on revenue but missed on profitability, as continued weakness in ad spends and elevated marketing costs weighed on margins," JM Financial said in its note. The brokerage pointed out that advertising revenues declined 10.6 per cent year-on-year (YoY), hit by subdued FMCG spending, while subscription revenues rose 5.5 per cent YoY, led by digital growth.
The firm highlighted that ZEE5 remained a key bright spot, posting a 32 per cent YoY revenue jump, its highest-ever quarterly performance, supported by subscriber additions and cost rationalisation. EBITDA margin stood at 7.4 per cent, compared with JM Financial's estimate of 9.4 per cent, reflecting higher expenses on content, advertising and promotions from two channel re-launches, Z rebranding and over 60 new launches -- including 39 linear and 26 digital.
The company's viewership share improved to 17.8 per cent in Q2, up 100 basis points (bps) YoY, positioning it well to benefit from an eventual recovery in ad yields. Management, according to JM Financial, remains cautiously optimistic about the second half of FY26, expecting better traction from festive demand, GST-led benefits and improving ad spends.
However, the brokerage noted that while sequential margin improvement is likely as one-off marketing costs taper, achieving the company's FY26 exit margin target of 18–20 per cent now appears ambitious. JM Financial said it has maintained revenue estimates but trimmed margin forecasts, now building in a 13.5 per cent EBITDA margin for FY26. The resultant 40–50 bps margin cuts translate into EPS reductions of 2.8–3.8 per cent, the note added. Despite this, the brokerage reaffirmed its positive long-term view on ZEEL.
Shares of Zee Entertainment Enterprises Ltd (ZEEL) slipped nearly 4 per cent in Friday's trade after the company reported a miss on profitability in its July–September quarter (Q2 FY26) results. The stock declined 3.89 per cent to a day low of Rs 105.10.
Brokerage JM Financial maintained its 'Buy' rating on the stock, projecting a 12-month target price of Rs 170, which implies an upside potential of 61.75 per cent from current levels.
"ZEEL delivered an in-line quarter on revenue but missed on profitability, as continued weakness in ad spends and elevated marketing costs weighed on margins," JM Financial said in its note. The brokerage pointed out that advertising revenues declined 10.6 per cent year-on-year (YoY), hit by subdued FMCG spending, while subscription revenues rose 5.5 per cent YoY, led by digital growth.
The firm highlighted that ZEE5 remained a key bright spot, posting a 32 per cent YoY revenue jump, its highest-ever quarterly performance, supported by subscriber additions and cost rationalisation. EBITDA margin stood at 7.4 per cent, compared with JM Financial's estimate of 9.4 per cent, reflecting higher expenses on content, advertising and promotions from two channel re-launches, Z rebranding and over 60 new launches -- including 39 linear and 26 digital.
The company's viewership share improved to 17.8 per cent in Q2, up 100 basis points (bps) YoY, positioning it well to benefit from an eventual recovery in ad yields. Management, according to JM Financial, remains cautiously optimistic about the second half of FY26, expecting better traction from festive demand, GST-led benefits and improving ad spends.
However, the brokerage noted that while sequential margin improvement is likely as one-off marketing costs taper, achieving the company's FY26 exit margin target of 18–20 per cent now appears ambitious. JM Financial said it has maintained revenue estimates but trimmed margin forecasts, now building in a 13.5 per cent EBITDA margin for FY26. The resultant 40–50 bps margin cuts translate into EPS reductions of 2.8–3.8 per cent, the note added. Despite this, the brokerage reaffirmed its positive long-term view on ZEEL.