Advertising revenue will remain under pressure in the first quarter of FY26 for broadcasters Zee Entertainment and Sun TV, according to analysts.
For Zee, ad revenues could decline by 13 percent year on year (YoY), dragged by a 15 percent YoY decline in domestic TV ad revenues, said Abhishek Kumar, Equity Research Analyst at JM Financial.
He expects the company to report Rs 792.4 crore in ad revenue in Q1 of FY26 versus Rs 911.3 crore it reported in Q1 FY25 and Rs 837.5 crore in the last quarter of FY25.
Ad revenues of Sun TV will not see as sharp a decline as Zee. "We expect ad revenues to decline 5 percent YoY. It will be relatively resilient as compared to the decline for Zee," he said.
The broadcaster is expected to report ad revenue to the tune of Rs 307.6 crore in Q1FY26, compared to Rs 323.8 crore in Q1 FY25 and Rs 307 crore in Q4 FY25.
"Q1 is a seasonally weak quarter due to a shift to IPL-led ads. This, along with still lackluster ad volume demand, and absence of election-led boost of last year is affecting ad revenues," noted Karan Taurani, senior vice-president, Elara Capital.
He pointed out that Zee’s subscription revenue may be driven by a surge in the digital segment while TV subscription revenues will remain flat. "Sun TV may post a growth of 3 percent YoY on a low base of last year," he said.
Kumar, on the other hand, expects subscription revenues to be flattish for Zee, which is currently negotiating the next phase of channel price hikes with MSOs (multiple-system operators) and DTH (direct-to-home) service providers.
Zee is estimated to report Rs 995.5 crore in subscription revenues in Q1 versus Rs 987.2 crore in the same period a year ago and Rs 986.5 crore in Q4 FY25.
Sun TV is expected to report Rs 425.7 crore in domestic subscription revenue in Q1 versus Rs 425.8 crore in Q1 FY25 and Rs 427 crore in Q4 FY25.
Overall, Kumar expects Sun TV's consolidated revenue to grow 38.1 percent sequentially and de-grow by 1.6 percent YoY. "QoQ increase will be led by IPL revenues while YoY softness will be due to a decline in ad revenue." He expects Sun TV to report total revenue of Rs 1,260 crore in Q1.
Indian Premier League (IPL) revenues are expected to be around Rs 492.1 crore, down from Rs 497.1 crore. "Sunrisers’ sixth place finish in IPL this year, versus runner-up in 2024, will impact IPL revenues," Kumar said.
It was a dry quarter for both the firms in terms of the movie segment. Movie distribution revenue for Sun TV is expected to be Rs 4 crore in Q1 same as the June quarter of last fiscal but higher than Rs 3 crore in Q4 FY25.
"Sun TV’s higher production costs to support new channels and IPL-related expenses in Q1 are expected to pare the earnings before interest, taxes, depreciation and amortization (EBITDA) margin to 44 percent, from 55.4 percent last year and 47 percent in Q4 FY25," said Taurani.
He added that a sharp drop in ad revenue and weak theatrical show may drag Zee's EBITDA margin to 12.5 percent.
Kumar expects streaming platform Zee5 revenues to grow in mid-to-high single digits, led by the initial success of its regional packs. "This trend, if continued, could support subscription revenues going further," he said.
Zee's revenue is likely to come down to Rs 1,903.9 crore from Rs 2,130.5 crore a year ago and Rs 2,184.1 crore, sequentially. "Weaker growth, along with elevated marketing spend towards relaunch of Zee’s new brand, could weigh," Kumar said.
It is expected to report a Profit After Tax (PAT) of Rs 165 crore, up from Rs 119.1 crore a year ago and sequentially down from Rs 188.4 crore.
Sun TV is estimated to report a PAT of Rs 563.7 crore versus Rs 546.9 crore in Q1 FY25 and Rs 362.3 crore in Q4 FY25.
"The operating environment for broadcasters remains challenging. A still soft, albeit sequentially better, volume growth for FMCG (Fast-Moving Consumer Goods) players is negated by likely cuts to their A&P (Advertising & Promotional) spend," Kumar said.
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