Ladies and gentlemen, good day and welcome to the Q1 FY 2026 earnings conference call of Zee Entertainment Enterprises Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to the Zee Investor Relations team. Thank you, and over to you.
Thank you, [Rayo]. Hi everyone, and welcome to our Q1 FY 2026 earnings discussion. We have with us today our CEO, Mr. Punit Goenka, along with the Senior Management Team. We will start with the opening remarks from Mr. Goenka, followed by commentary on operating and financial performance by Mr. Mukund Galgali, Deputy CEO and CFO. We will subsequently open the floor for questions and answers. Before we get started, I would like to remind everyone that some of the statements made or discussed on today's conference call will be forward-looking in nature and must be viewed in conjunction with the risks and uncertainties we face. The company does not undertake to update any of these forward-looking statements publicly. With that, I will now hand over the call to Mr. Goenka. Thank you.
Thank you very much. Good evening. Thank you for taking the time out this evening to discuss the company's performance in the first quarter of the financial year, 2025-2026. Several steps were implemented across the business, being the first quarter, that have allowed well for the company. Let me begin by speaking about the efforts that we have undertaken and the subsequent results being witnessed across the business, post which Mukund Galgali will elaborate on the financial and operating metrics pertaining to the company's performance. We commenced the new fiscal year with the company's ongoing strategic transformation into a content and technology powerhouse by unveiling our sharp new brand universe. The new identity is a reflection of our rich legacy and growth aspirations, as I am certain all of you have experienced the new Zee in its various forms and expressions over the last few months.
The new identity is much more than a visual change for us, it displays our agility and strategic approach to embrace technology-led innovations and create a more meaningful entertainment experience for the consumers across the globe. Speaking about the quarter gone by, let me start with content, the heart of our business. Over the last couple of quarters, the team has put in significant efforts to enhance our content offering in every market. I am pleased to share that we are beginning to witness a positive momentum in this direction, and our linear viewership share touched 16.8% in quarter one, further fortifying our position as a strong player in the industry. In fact, during the month of June itself, we have clocked a viewership share of 17.8%, which is nearly a two-year high for us.
A considerable portion of this growth stems from our sharp focus on creating quality content across languages, and it is encouraging to see that the viewers are receptive towards our new content lineup. We are further enthused by the strong growth story emerging from the key markets, such as Hindi, Marathi, Kannada, Odia, and Bangla amongst others. With the aim to offer a more meaningful entertainment experience to our viewers, we are creating new high-potential avenues in the realm of content and technology. Our strategic partnership with the content and tech startup Bullet will further enable the company to enter the microdrama segment and cater to young audiences who sought for high-quality content. The steps being taken are consistent with our growth plans for the future, and we will continue to evaluate emerging value of creative opportunities across segments.
During the quarter, in order to address the new set of audiences, we took the required steps to reach their households through fairness. We believe that this new audience segment will be a growth driver for the company as we progress into the fiscal. We will continue to evaluate our strategy in line with the gains being accrued within the segment. Language presence and understanding the pulse of the audiences across markets is a pivotal competitive advantage for the company. We are further leveraging this strength not only across content, but also to build a compelling experience for our consumers. During the quarter, ZEE5 introduced a tailored subscription plan in seven languages for users to enjoy content in their favorite language.
The platform is already witnessing transaction as a result of this move, and we are expecting further gains in subscription revenue in the coming quarter as a result of the language-first strategy being implemented. The growth story on digital continued in this quarter, with significant energies being invested in enhancing the content flow and the overall experience. The fiscal prudence exercise, not just in the digital business but across the company, is all going well for us, and our energies remain directed towards achieving the enhanced level of profitability. Speaking about the movie business, we remain focused on building Zee Studios as a pan-India player. We are garnering a positive reception at the box office for some of our language films quarter on quarter, and we will continue to bring this as a unique strength of ours.
As one of the largest music publishing labels, Zee Music Company maintains a strong footprint in the market. While content is a big area of focus for the company, another key lever for business growth is advertising revenue, wherein we are taking concerted efforts to address the impact of macro-economic headwinds and slower-than-expected recovery in spending. That said, we continue to maintain a cautiously optimistic outlook on advertising revenue growth. Additionally, the early onset of monsoon in many regions is resulting in healthy recovery and boosting consumption. We have noted a positive future outlook from advertisers in this regard, and with the onset of the festive season, we further remain hopeful of this momentum flowing into advertising revenue growth in the upcoming quarters.
Amidst this scenario, we continue to maintain sharp fiscal discipline and strengthening our balance sheet to fuel our future growth ambitions, and we will take the required steps to enhance the margin further, profile further. I would also like to take this opportunity to welcome two new members to our esteemed board, Ms. Divya Karani and Mr. Saurav Adhikari. Their rich expertise and wisdom will further augment the efforts of the management team to achieve the targeted goal. At a macro level, I firmly believe that we have stepped into the new fiscal with determination and action-oriented steps. As our efforts continue to showcase the desired results, we remain confident of building a robust growth trajectory centered around content, technology, and fiscal discipline. I would now like to hand over the call to Mukund to share his further details of the company's performance during the quarter.
I look forward to interacting with you all in the Q&A session later. Over to you, Mukund. Thank you.
Thank you, Punit. Good evening, everyone, and great to connect with all of you. I hope you had an opportunity to review our quarter one results, which have been uploaded on our corporate website and the stock exchanges. I will focus my remarks on providing more context to our performance during the quarter and will also share our outlook. Q1 FY 2026 remains to continue to be a stock for the industry, driven by the continued weakness in consumption. Despite this, our profitability has remained fairly stable during the quarter, driven by the various initiatives taken by the company. The evolving consumer behavior and technological advancements are becoming the growth tailwinds for this sector, and it remains well poised to witness robust and orderly growth across all segments in the near future. This further places us well for this financial year, and we are progressing forward on our targeted growth path.
During Q1 FY 2026, the linear advertisement spending environment remained soft due to the extended sports calendar and slowdown in spending by FMCG Company. On the subscription side, the overall revenues remained flat. We saw growth in digital revenue, which was partially offset by a slowdown in linear TV subscription revenue due to a decline in pay-TV subscribers. We are hopeful that with a conducive pricing policy framework being in place, there will be an opportunity to drive gradual growth in subscription revenues in line with inflation. From an industry backdrop perspective, the linear TV landscape remains in a healthy range, with weekly impressions above 27 billion and a weekly reach over 714 million. On the linear business front, we continue to remain India's strong number two TV entertainment network.
As you look at the viewership for quarter one FY 2026, which Punit had also mentioned, kindly note that the GEC share in Q1 is usually impacted by a seasonal pickup in sports properties and kids' genre during the summer, and this year it was also further impacted by geopolitical tensions moving the audience away from GEC. Despite these factors, our viewership share during the quarter grew by 40 bps, YoY to 16.8%, and in the month of June, our viewership share has reached 17.8%. This demonstrates that our strategic efforts are implemented in the right direction. Coming now to the digital business, we released 17 shows and movies during the quarter, including five originals. ZEE5 continues to demonstrate steady growth with healthy and stable usage and engagement metrics.
ZEE5 revenues increased by 30% YoY in Q1 FY 2026, aided by digital syndication revenue as well as pricing strategy implemented in languages, which has driven the subscriber growth. In line with our strategic priorities, we are focused on maintaining a balanced cost structure, driving return on investments to sustain our long-term growth. We have reduced our EBITDA losses in digital by INR 1,119 million YoY in quarter one FY 2026, aligned with our stated objective to achieve breakeven in ZEE5. On the studio business, during the quarter, we released seven movies, three in Hindi and four of regional, of which we have produced and distributed two movies and only distributed five movies. As it was a lean movie calendar in comparison to quarter one FY 2025, wherein we had movies like "Medan" and "Mr. and Mrs.
Mahi," our other sales and services line item during the quarter has declined by 64% on a YoY basis. On the music business, during the quarter, we garnered over 62 billion total video views, with over 168 million subscribers of YouTube, driven by our new age music catalog and our rich library of over 18,000 songs. Within the music, our profitability continues to remain fairly healthy, and we are further diversifying our catalog into other language markets. Now, coming to costs and profitability of the company, the overall operating cost has declined by 14% YoY due to an efficient execution in programming technology and continuous cost optimization in ZEE5, while we have also incurred additional expenditure toward rebranding across the company and launch of seven language packs.
This effective cost management in a soft advertising environment has helped us to maintain our momentum on profitability with our EBITDA margins at 12.5%. The profit after tax from continued operations for the quarter came in at INR 1,437 million, which is up by 14% YoY basis. On the balance sheet side, our focused efforts have enabled us to strengthen our liquidity and financial position further. The cash and treasury investments as of June 2025 stood at INR 21.9 billion. It includes a cash balance of INR 3.9 billion, fixed deposits of INR 7.6 billion, and investment in liquid mutual funds of INR 10.4 billion. Our content inventory continued to decline in this quarter, driven by optimized acquisition. June 2025 content inventory advances and deposits were at INR 70.2 billion, lower by INR 0.3 billion on a QoQ basis.
As a part of our efforts towards the new strategic initiatives, we have entered into a strategic partnership with content and tech startup Bullet to launch a microdrama app. Further, our partnership with Ideabaaz Technology Pvt Ltd. will further enable us to tap into the rich entrepreneurial spirit of Bharat and showcase unheard stories and innovations from the tier 2 and 3 markets. Moving through the rest of financial year 2026, we remain committed to our stated aspiration for the year-end. Accelerating growth, profitability, and cash generation continue to remain our priority, and this will be further driven by the new initiatives which we are working on. With this, I would like to hand it back to you, [Rayo].
Thank you very much. We will now begin the question-and- answer session. Anyone who wishes to ask questions may press star one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Abneesh R oy from Nuvama . Please go ahead.
Yeah, thanks. My first question is on the advertising scenario in the balance three quarters of the year. If I see the macro, there's a clear improvement. Food is taking generalizations, good recovery there, soft numbers there. Interest rate cuts also, we have seen a decent swing. We have also seen good monsoon forecasts and good monsoon printouts. How do you see FMCG companies' spending? The updates which have come, business updates generally, outlook-wise, everyone is saying there is an improvement. When I see your Q1 numbers, it's a sharp decline. You did mention on some of the one-off figures there. You also have been mentioning your market share improvement. Broadly, last few years, it is there in that ballpark, 16%- 18% range. I think from a market share perspective, you may be doing good.
Ultimately, to come back to growth, that overall issue of the OTP digital taking away share, I think that remains. How do you see the balance three quarters? Any clarity you're getting on your advertising growth in the balance three quarters for the year?
Yeah, Abneesh. I think you're absolutely right that there is, as I said in my opening remarks as well, that given the monsoon and other things, the consumption is looking very positive. Therefore, we are cautiously optimistic on advertising revenue coming back. Right now, it's still very early days for us to comment and give you any outlook on that. As far as what Mukund stated, our objective of the growth trajectory that we had guided for in the beginning of the year, which was 8% on advertising, is not changing. We are not withdrawing that or changing that. We will stick to that and continue to work towards getting that done. I do not want to comment specifically on FMCG, but I think there are huge opportunities from where we can get more advertising revenue for the network, et cetera.
On your second point on the network share improving, the range of 16% -1 8% is a very large range. While you are at 16%, it's pretty much the same as last year. As we are nearing towards 18%, that will certainly have a big flip for our advertising revenue going forward.
Abneesh, if I may add on, I think you also need to look at some of the levers which are going to have an impact going forward. The first one is, I'll pick up the ratings again. As we speak, you must have heard Punit and Mukund talking about we are achieving a rating of about 17%+ in the month of June. As we speak in July, our ratings have already crossed 18%. Of course, this needs to be sustained going forward, but it looks like we are on the right trajectory, and the current content state is really firing. Having said that, also in the second half of the year, there is a whole slew of new content which is going to get released, be it fiction or nonfiction. We are also very hopeful of that, again, further giving boost to our ratings.
That definitely will have a significant impact on the revenues going forward. Number two, there are also the new initiatives which we have spoken about in the past. We have also posted a presentation on the website. All those new initiatives, whether we are focusing on our retail, getting the retail advertisers, or in brand, acquiring content brand integration, all those initiatives will start having an impact only in the second half. This year structurally is a bit of back-ended from that point of view. That's how we have built the business plan also. Thirdly, since you touched upon FMCG, yes, they have been giving positive outlooks, especially in terms of the volume uptick. Hopefully, that gets translated into numbers. As Punit said, we are still not setting our expectations high. We are just holding back and watching right now.
These are some of the levers which will probably give a further boost to the revenues going forward.
Two quick follow-ups to what you said. One is, I completely understand the market share improvement which is happening. Now, given the consolidation which has happened in the sector, we have seen Jio - Hotstar come together, so extremely high dominance on the OTT part because of the preset and all that. When I put everything together on the OTT part, clear high dominance. Even on the linear TV, there is a high market share. When I put both things together, now there is one large dominant player, and then, yes, your market share does improve from, say, 17% to, say, 18%. Does it lead to the benefit which could have come if, say, the consolidation would not have happened? Is consolidation negating the market share improvement? That is my first question. Second is not changing the guidance.
That means in the balance three quarters, your advertising growth will be in double digits. What gives you the confidence? Is it the base effect? Because nothing changes in advertising to fix you also. Is it the base effect where you are getting that compass?
Yeah, I'll take the second one first, Abneesh. Certainly, it is a base effect. That is one key factor. Apart from that, it's also the fundamental thing that Vikas talked about, the new initiatives that we are trying to build around retail, around finding advertisers which currently may not be on television, but maybe on other mediums of media to bring them to television. What Vikas talked about, that it's going to be skewed towards the second half, is what gives us the confidence. As I said, we normally don't change our guidances mid-year. Therefore, we'll stick to the guidance that we have, and we'll work towards it, and we'll keep giving you updates as we speak. In terms of consolidation, I think that's a benefit for the industry.
It's not a downside for the industry because instead of having three to four players, now you have maybe two and a half or three players at best. Therefore, our ability to negotiate with advertisers or even DCOs goes up that much more. Obviously, as you know, anything in the media business has a lag effect. Therefore, that's the stage we are in currently. We'll have more color for you as we go ahead in the year.
My last question is on ZEE5. You are trying to segment and have the regional offerings, which I think any OTT has. Any OTT is being open, then be the language offering. I think you are trying to make it a bit more affordable. If anyone wants to go for a specific language, you pay much lower. Does that lead to that kind of a benefit? Any customer can go for the overall app and then choose, because then he'll have much more content across languages. A lot of people are now consuming even languages which they don't understand through the click, which comes at the bottom. I'm trying to understand your overall exit of the year you are targeting profitability in ZEE5. What is it contingent on? A lot of the things which you are doing have been done earlier. Is it just, again, the consolidation which is held?
Everyone is focusing on profitability. The levels are going up in the industry. Is that what is helping you in terms of profitability in terms of the exit for this year?
Yeah, I think you are right, mostly, Abneesh, that we are looking at our ARPU growth and our subscriber base growth as well. The reason why we went for this language subscription pack distribution, as you rightly put it, one, it is to make it more affordable from the consumer point of view because our feedback from the consumer was that, why am I paying for languages that I don't even consume? There may be a few people or some segment of audiences that are watching language shows dubbed into either Hindi or in English or whatever it may be. There is a large population that does not. Therefore, we thought that this is, we believe that this is a good strategy for us to capture a larger subscriber base for our app, ZEE5, and that's how we are going about it.
Thank you. That's all from my side. Thank you.
Thank you, Abneesh.
Thank you. Next question is from Kavish Parekh from B&K Securities. Please go ahead.
Hi. Thanks for the opportunity. My question pertains to ZEE5. Revenue growth continues to be healthy, and you aim to achieve breakeven by the end of the year while growing content threefold. How do you plan to balance this? I understand you have mentioned that an omnichannel content creation strategy will help manage costs. Wasn't this approach already being followed, that is, leveraging the same content across multiple platforms? Do you think relatively modest investments in content could impact ZEE5's medium to long-term revenue growth as a team? That was my first question.
Mr. Parekh, I think I was asking that in my earlier response to Mr. Roy. The fact of the matter was that our subscriber base was stagnating because people didn't want to pay for everything because it's being offered to them. That's why we went through this whole language strategy. We've already started to see traction on how the subscriber base is growing there, and we are quite hopeful that that will be leading to us getting far more shares in the market.
I'll further add that, you know, in terms of the omnichannel content strategy, with things like Bullet coming in as well, we will be able to do far more experimentation and, you know, exchange of IPs within platforms from micro series to mini series to mega series. We have a plan to execute that efficiently. Secondly, in terms of language packs, while others are present, like Mish mentioned previously that, you know, what is new in this? We've seen that in certain markets, original series were not there, for instance. With our sustained focus on this area of having language-wise original programming and not dubbed programming, we are confident of results in this.
Kavish, just to add on, what we are doing actually is we are working both on the breadth and the depth of the content offering for each of the languages, which means we are not only providing in terms of breadth, we are providing content in various formats, be it long form, short form, web series, micro series, or mini series, as well as on the depth, which means there is enough for any one language subscriber to come and watch content. There is going to be enough in the funnel and not just haphazard kind of content which we'll be offering. All this year, the blended cost of all this is at a reasonable level. That's what's giving us the cost-benefit out there. This is nothing new.
We are simply trying to impose the success which we had when we ran or when we started the language market from the TV side. We take pride in the fact that we have cracked that market by giving quality content at a reasonable price and at a much lesser price as compared to the Hindi content. That's what we are trying out here also. We are not compromising on quality for sure, but at the same time, we are being able to give the same offering across the breadth and depth of the content at a reasonable price. That's what gives us the cost leverage going forward. Of course, any incremental revenue which comes in is not going to come at an incremental or commensurate increase in the cost. That is going to go and contribute to our profitability or the breakeven target which we have taken.
Understood. Thanks a lot for that detailed explanation. Second question is that we were expecting that reducing losses at ZEE5 would be a key contributor to overall margin expansion. However, with plans to invest in new initiatives, what kind of investments are being considered? Would these investments potentially extend the timeline for achieving the targeted 18%- 20% margin by the end of the fiscal year?
Yeah. Kavish, in terms of our plan, all these investments have been captured when we looked at our, you know, margin guidance of 18%- 20%. Since the plans and the rollout of ZEE5 strategy has just been done recently, you will see substantial, you know, improvement in the EBITDA of digital in quarters going forward. Yes, the plan is there very much, and it factors into consideration the new initiative. It's a matter of, you know, timing that when we hit that spot of, you know, achieving breakeven.
All these new initiatives, the investments are going in a staggered manner. These, all the new initiatives collectively will take about 2-3 years to really start having an impact, a meaningful impact on the profitability of the company and to attain the scale which we are desiring. That is the kind of timeline which we are looking at. As Mukund said, this 18%- 20% target for this year which we have taken does factor in the investment required for these new initiatives.
Is there any quantification that we can give for the investments planned over the next two to three years?
I think we will avoid that for the time being, Kavish. We are ruling it out. Probably at some later stage, we'll contemplate giving these numbers.
Just the last question from my side. We plan to grow out some more details on the Zee Music Company and ZEE5 side. Any comments on that?
We are internally working on those metrics. We are, along with the business teams, identifying which are the best KPIs to give out to the world at large so that you have more hang of the business which we are operating. Just have some more patience; soon we'll start sharing those numbers.
Thanks a lot. Thanks a lot. All the best.
All right.
Thank you. Next question is from Sameer Gupta from India Infoline. Please go ahead.
Hi, good evening, and thanks for taking my question. Most of them have been answered. Just two things from my side. Sir, I've seen your presentation, and you also mentioned a focus on retail advertisers. I believe it is for linear TV. If you were to elaborate here, because why would a local retailer pay for a pan-India advertising? I believe the local retailer is already advertising on the live stock YouTube where ads are being shown in only the local or relevant geography. Is it possible for you to do the same with linear TV? If not, how is this going to work?
I've never suggested for a minute that this is only for linear TV. It is for both the digital markets and linear business. Given that we are operating in 12 different languages in this country, we are very well poised to give opportunity for these advertisers to come on to building brands. What they are doing on the likes of the digital platforms that you mentioned is purely transactional. What we offer as a linear platform is more of brand building. I can give you an unseen number of examples of how brands we have built in the language markets, whether it be in Marathi, whether it be in Tamil or Telugu, and so on and so forth. I think that is not for the open line. You can take that offline with Vikas.
Sure, sir. Just to clarify, this is not something which is technologically different. This is just pure, you know, a retail advertiser using a Zee Bangla, let's say, for advertising whatever he wants to advertise and build his brand. Is that a fair understanding?
It's a combination of, let's say, your example of Zee Bangla and the Bengali content that we offer on ZEE5.
Got it. This is so sweet, sir. Thank you. Second question is on the others' portion. Now, this is the movie theatrical and syndication revenue. Last year, I believe you floored around INR 775 crore. Now, once you have been really soft, I just wanted a guidance here. What kind of revenues are we earning for this whole year? I know it can be lumpy in a particular quarter. I'm just trying to understand that.
Let me talk in rather than in the dollar terms, let me talk in the slate term. This quarter, we did not find any meaningful relief. Having said that, the slate for the entire year is pretty much intact. You know, as we have always given a guidance that every year we target to make about 20- 25 movies across languages offered, you know, in a particular budget zone.
That is what we are going to do this year also. You can infer from that, you know, what kind of revenue growth rates will be. The slate is pretty much intact. We are going to have a similar number of movie releases this year as well.
Yeah. Just a clarification here. The one-two number is not out of ordinary. It is something that you expected, or would you say it is slightly below what you would have expected at the start of the quarter?
There were just two releases which got pushed by one quarter. That was the only change. It's only a change in one quarter. Otherwise, we are going as the plan.
Got it. Last question, if I may please, any update on the Star arbitration case?
There is no fresh update on that. As we have said in the last call also, both the sides have made their filing depositions. We believe our lawyers are also confident that we have a very good case to defend. The outlook will only get to know next year. Let's see.
Great. I'll let that talk. Thank you, I'll come back and let you go in the follow-up.
Thank you. Next question is from Umang Mehta from Kotak. Please go ahead.
Thank you. Just two questions. First one on your ad revenue. Could you call out if you already started to see any uptick because of FTA re-entry ? If you're just beginning, do you think you can pick up and contribute meaningfully going ahead? That's a first question.
Certainly, Umang, I do believe that the advertising uptake on the Free Dish market will be something that will help us in our growth. Right now, it's still very early days. As you know, in the BARC ecosystem and in the advertisers' ecosystem, anything that's less than 13 weeks of creating does not register in a significant manner. Given that we are just about coming out of the 13-week period, we hope to see going forward some substantial gain after this.
Understood. That's helpful. The second one was on your subscription revenue. You mentioned that linear has declined and ZEE5 has grown. Two questions linked to it. Firstly, in ZEE5, the 30% growth, was there any one-time authentication revenue boosting this? If it wasn't the case, then if I adjust the growth in your overall subscription revenue, that means that the linear subscription revenues have declined in double digits, just about 10%. If you can just help us understand what's really happening.
Thank you, Umang. There has not been any extraordinary income coming from the syndication. The syndication revenues are at pretty much the same level which we have seen last quarter. No extraordinary income out there. In spite of the, I mean, without any spike owing to the syndication, we have achieved a 30% growth on a Yo Y basis on the digital subscription.
Okay. On the linear TV subscriptions, is it correct that the decline was maybe high single digits to around 10%? If that was the case, how's the outlook for the remaining three quarters? Thanks.
No, because if you know how the linear TV business works, we do annual deals, and our deal work is currently in single digits. We are still trying to see how to correct that.
[audio distortion]
The agreements that are to be renewed still are not renewed. We accrue revenue only on the basis of agreements done. Therefore, we wish to correct that very soon, and we'll keep reporting that to you on a quarter after the fact.
Sure, sir. Thank you. All the best.
Thank you.
Thank you. Before we take the next question, a reminder to participants putting their press star and one to join the question queue. The next question is from Jinesh Joshi from PL Capital. Please go ahead.
Yeah, thanks for the opportunity. I just wanted to know that the language subscription packs that you have launched in ZEE5, are they a part of any B2B deals, or are these packs directly being sold to the consumer, which may perhaps have a higher ARPU?
As of now, they are not part of our B2B deals, Jinesh. We are exploring and negotiating with them as to what we can do. If you will see, we only launched these on June 6th. We are less than, you know, just four weeks into the whole thing. We are working on that. We will have more color for you in the coming quarters.
Yeah, can I just say one more clarification required? I mean, the decline in the subscription revenue, is it fair to assume that the renewal of Zee Anmol and putting it into the FTA category also may have contributed to the decline, apart from the reason that we gave with respect to falling pay TV subscribers?
See, historically, N mode was always part of Swedish until we removed it. We had not witnessed any decline at that point in time. As I said, it's too early for me to comment that whether the decline in the subscriber base on pay TV is due to Anmol alone. It could also be due to the fact that we are still amidst negotiations with a lot of the MSOs for the FY 2026 deals. As you know, these deals with the DPOs normally take a long time to happen. We have to wait and watch. I don't think it's too early for me to comment that Anmol could have caused this kind of a decline for the entire entity or for the entire company because Anmol is only operating in the Hindi language, whereas we are operating, as I said, the network in 11 - 12 languages.
These negotiations with DPOs predominantly are due to the price hike that we have announced in January, right?
Yeah, that's right, Jinesh.
Got that. One last question.
For annual deals, yeah.
Got that. Just one last question from my side. I think in the earlier part of the call, you mentioned that in July, the ratings have dropped about 15%. I just wanted to know which markets are exactly seeing an improvement because I think our viewership focus has, you know, three markets, like Zee TV, Marathi, and Tamil. Is it basically markets that are not doing well have started seeing some improvement, or is it that some markets which have done well are seeing further improvements in viewership? If you can shed some light on that.
As I said in my opening remarks, Jinesh, Hindi, Marathi, Kannada, Odia, and Bangla are the ones where we have seen significant growth. Not to say that the other markets are not doing well. The other markets are also performing reasonably well. These are where we have seen significant growth.
Okay, guys. Thank you so much. Thank you.
Thank you. Next question is from Abhishek Kumar from JM Financial. Please go ahead.
Yeah, hi. Good evening, and thanks for taking my question. Most of my questions have been answered. I have one question on the strategic initiatives that we had announced around value-unlocking opportunities. While you mentioned that you're in the process of deciding which KPIs to disclose, is there anything in terms of any progress in terms of carving out that business into a separate subsidiary? We got the Chief Business Officer for those businesses. Any progress so far? Is there any timeline that we can share in terms of when and what we need it to be?
Yeah, Abhishek, as I have mentioned in various calls in the past also, the reason why we are not carving out ZEE5 into a separate entity is so that the company can continue to take the benefit of the tax thing. Because otherwise, if ZEE5 is incurring losses and you carve it out into a separate entity, we will lose that tax benefit completely. Now the company will end up paying more tax, which means lesser PAT and lesser money back for you there.
I meant Zee Music, ZEE5, I understand, Zee Music as part of the value-unlocking initiative.
We keep evaluating that, Abhishek. As and when we have the right opportunity to carve it out and bring in the corporate entity, we will certainly come back to you. It is something that Vikas, Mukund continuously keep bugging me on. Not yet, I can't give you a timeline as of now.
We have taken on board the Business Officers for both the segments of syndication as well as for music. They are also working on the plans to see what will be the best way to operate and take this forward.
Abhishek, not putting a timeline to that, but that's on our radar, right now.
Great. The second question is on the cash infusion. Obviously, the company had certain plans with the fresh cash that was supposed to come in. Now, with that resolution not getting passed, any change in our plans in terms of, you know, we were thinking of re-entering into stores or certain acquisitions, do you think any change in plan is needed now because that cash is not coming in?
No, Abhishek. Nothing changes on that front. In fact, we are as committed as we were on not only enrolling those new initiatives, but also increasing and strengthening the core business and increasing the operational performance out there. We are as focused as—nothing changes in terms of our focus or priority out there. It's business as usual from that perspective.
One last bookkeeping question. You know, what explains the dip in cash balance this quarter?
We have basically deployed two things. One is the cyclical collection from subscription. Typically, Q4 is a high, you know, collection period for the subscription.
It's followed with a dip in product. Is it one cycle from the, you know, a consumer pack?
There is the lab deployed funds into our investments in content and other initiatives. It's just in operational requirements which have been locked.
It's a working capital thing, Abhishek. Nothing beyond that.
Okay, I understand. Thank you and all the best.
Thank you.
Thank you. Next question is from Sambhav Jain from Vardhaman Investments. Please go ahead.
Sambhav Jain from Vardhaman Investments, you may go ahead with a question.
I think we've lost him.
Right. There seems to be no response from the line of Sambhav Jain. We'll take that as the last question. I would now like to hand the conference back to Mr. Vikas Somani, Head of Strategy and Investor Relations, for closing comments.
Thank you, everyone, for joining us today. We hope all your questions were answered. Do feel free to reach out with any follow-up questions, or if your query remains unanswered, we'll be available and look forward to speaking to you next quarter. Thanks so much, and have a great evening.
Thank you very much. On behalf of Zee Entertainment Enterprises Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.