Shares of Zee Entertainment came under pressure on June 19 following the resignation of CFO Rohit Kumar Gupta, who cited personal reasons for his departure. The company has appointed Mukund Galgali, head of Zee’s commercial and strategic initiatives and a 17-year veteran of the group, as the interim CFO.
As of 11:06 am, ZEEL shares were trading 2.36 percent lower at Rs 157.13 on the National Stock Exchange (NSE). This year, the stock has plummeted 44.66 percent, significantly underperforming the benchmark Nifty 50.
Cost-Cutting and Restructuring
Recently, Zee implemented several cost-cutting measures and leadership restructuring to reduce losses, including a 15 percent workforce reduction. Earlier this month, the board granted in-principle approval to raise up to Rs 2,000 crore through the issuance of shares or eligible securities, following the termination of a $10 billion mega-merger with Sony in January.
Financial Woes and Signs of Recovery
Zee has faced financial challenges over the years, with advertising revenue falling to $488 million in 2022-23 from around $600 million five years earlier, and cash reserves decreasing by approximately 25 percent during this period. However, the company swung back to profitability in the latest quarter, reporting a profit of Rs 13.35 crore for the quarter ended March 2024, compared to a loss a year ago. This turnaround was driven by strong demand for advertising and reduced expenses, with domestic advertising revenue rising nearly 11 percent year-on-year, spurred by the recovery in the macro advertising environment and increased spending by FMCG clients.
