Motilal Oswal has maintained a 'Neutral' rating on Zee Entertainment Enterprises Ltd but lowered its target price to ₹70 from ₹80. The brokerage highlighted weak Q2 FY27 profitability despite revenue growth. The stock touched a 52-week low of ₹62.06 as investors weighed high content costs and sluggish linear TV advertising.
Motilal Oswal has kept a 'Neutral' stance on Zee Entertainment Enterprises Ltd (ZEEL) while reducing its target price to ₹70 from the previous ₹80. This decision follows the company's recent Q2 FY27 results, which revealed a sharp 52% year-on-year decline in EBITDA. The brokerage indicated that while revenue saw a 13% boost, the core business is struggling with profitability, leading to margins contracting to 3.2% from 7.4% in the same period last year.
The revenue growth for the quarter was largely supported by subscription income related to the FIFA World Cup 2026 broadcast rights. However, this revenue spike is temporary and masks underlying issues in the company’s core linear television business. Operating costs rose by 18% during the quarter, driven by higher spending on content and promotional activities, which significantly pressured the company's bottom line.
Digital Gains vs. Linear TV Challenges
A key highlight in the earnings report was the digital arm, ZEE5, which showed strong momentum. ZEE5 revenue doubled to ₹6.26 billion compared to the previous year, with the division recording a positive EBITDA of ₹416 million. Despite this progress in digital engagement and subscriber additions, analysts remain cautious about the overall company performance. The success of the digital platform is currently insufficient to offset the stagnant advertising environment and rising operational expenses within the core broadcast business.
Investors are keeping a close watch on how the company manages the structural shift in advertising spend, as brands increasingly move their budgets from traditional linear TV to digital platforms. The advertising market for television remains subdued, making it difficult for the broadcaster to see organic growth in its core segment.
Stock Reaction and Investor Monitorables
The market reacted to these performance pressures as the share price touched a 52-week low of ₹62.06 on November 2, 2026. For shareholders, the key factors to track in the coming quarters include the sustainability of margins as promotional and content-related spending continues, and whether the company can achieve advertising revenue growth in its linear business. The company's ability to balance its digital expansion with the recovery of its traditional broadcast revenue remains a central challenge.