Zee Entertainment Enterprises Ltd

NSE:ZEEL

Earnings Call Analysis

Zee Q3 Results and Aspirational Targets

ZEE's digital platform ZEE5 achieved a 31% year-on-year revenue growth over 9 months, with quarter 3 FY24 revenues up 14.9% year-on-year. However, revenues declined by 15.8% quarter-on-quarter due to a previous syndication deal. Zee Studios' revenues declined due to fewer movie releases. ZEE5's prudent cost management contributed to a narrower quarterly EBITDA loss by INR 99 million. EBITDA margins dropped to 10.2%, reflecting operating costs reduction by 12.8% quarter-on-quarter but also highlighting lower revenues' effect on operating leverage. Looking forward, Zee aspires to achieve 8% to 10% overall revenue CAGR and aims to reach an 18% to 20% EBITDA margin by FY26, anticipating initial margin pressures due to one-time costs over the next 3-6 months before gradual improvements by H2 FY25.

Uncertain Times Lead to Aspirational Growth Targets Amidst Strategic Refocus

The earnings call of our company took place during a time of strategic transition, marked by the termination of a proposed merger with Sony. While there was a clear intention to execute the merger, various undisclosed disagreements led to Sony's withdrawal from the deal. As we move beyond this, we focus on strengthening the company's intrinsic value and pursue a growth trajectory aimed at bolstering our margins and embracing frugality, optimization, and a commitment to quality content. Despite macroeconomic uncertainties affecting advertising revenues, a surge in subscription revenues by 9% year-on-year to date for FY '24 provides a silver lining. Going forward, we anticipate a gradual recovery in margins and target ambitiously to achieve an industry-leading 18-20% EBITDA margin by FY '26, along with a steady-state revenue growth of 8-10% CAGR.

Broadcasting and Digital Presence: A Dual Growth Engine

Our broadcasting business has shown resilience, with a 78% share of Zee's portfolio gaining ground in FY '24 year-to-date, boasting 40 basis points (bps) market share growth—the highest among networks, particularly in the South. Although Q3 performance was hindered by competing cricket events, there are evident opportunities for network share growth. On the digital frontier, ZEE5 has grown impressively, with a 31% increase in revenues over a 9-month period. This expansion is backed by prudent cost management, leading to a narrowed EBITDA loss quarter-over-quarter and an overall positive outlook for our diversified content creation and distribution strategy.

Financial Health and Cost Management Lay Groundwork for Recovery

In the backdrop of Q3 operational costs falling by 12.8% and EBITDA margins standing at 10.2%, our Q3 net profit was notably affected by exceptional expenses related to the terminated merger with Sony. Nevertheless, our concentrated efforts on cost control and working capital optimization have resulted in robust free cash flow, enhancing our liquidity position. As we stand alone post Sony's withdrawal, our determined management of costs and capital allocation reflects a strong financial standing and a solid ground for future performance optimization.

The Road Ahead: Cautious Optimism with Aspirational Guidance

Although we are still recalibrating our strategy as a stand-alone entity, we aspire to achieve an 8-10% overall revenue CAGR with a steadfast ambition to reach an 18-20% industry-leading EBITDA margin profile in a stable macro environment. These aspirations reflect our confidence in the company's structural strength and business fundamentals. As we progress on this journey, we remain committed to maintaining cost discipline and are optimistic about our pathway to recovery and sustainable growth.

Earnings Call Transcript 2024-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to the Q3 FY '24 Earnings Conference Call of Zee Entertainment Enterprises Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Mahesh Pratap Singh, Head of Investor Relations, Zee Entertainment Enterprises Limited. Thank you, and over to you, sir.

[Mahesh Singh, executive]

Thanks. Hello, everyone. Welcome to our Q3 FY '24 earnings discussion. We hope you've had an opportunity to review the results.

Today, we are joined by our Managing Director and CEO, Mr. Punit Goenka, along with the senior management team. We will start the call with opening remarks from Mr. Goenka, followed by commentary on financial performance by Mr. Rohit Gupta, our Chief Financial Officer. We will subsequently open the floor for questions-and-answer session.

Before we get started, let me remind everyone that some of the statements made or discussed on today's conference call will be forward-looking in the nature and must be viewed in conjunction with risks and uncertainties we face. The company does not undertake to update any of these forward-looking statements publicly.

With that, I'll now hand the call over to Mr. Goenka for his opening remarks.

Over to you, PG.

[Punit Goenka, executive]

Thank you, Mahesh. Good evening, everyone. I hope all of you are doing well. Thank you for taking the time out today to join the call as we discuss the company's performance in the third quarter of financial year 2024.

I'm accompanied today by our -- with our CFO, Rohit Gupta, who will take you through the company's performance and overall market dynamics in detail, while I touch upon our plans for the future.

Before we begin, let me address the points pertaining to the merger. As you all are aware, the company's proposed merger was terminated by Sony through a communication received on 22nd January 2024. The same was reviewed by our Board and appropriate steps have been taken in consultation with the legal experts that are in the best interest of our shareholders and stakeholders. We have even approached the National Company Law Tribunal to seek direction on the implementation of the scheme.

I would like to mention that as a member of the founding family of Zee, as a shareholder of the company, and most importantly, as the leader of this organization, I certainly wanted the merger to be implemented. In line with the aspirations, we even took several steps towards the divestment or disclosure -- or closure of profitable businesses in the domestic and international markets. I personally offered several proposals and solutions to Sony to address their demands. But unfortunately, they remain unaccepted. Since the matter is subjudice, I would not like to say more and let the law take its own course.

I am a firm believer in learning from the past, living in the present, and believing in the future. Therefore, I would prefer to talk about the company and its potential to deliver a stronger growth trajectory going forward.

Over the last few years, the overall macroeconomic environment remained soft due to weak consumption patterns in some markets. As a result, the advertisement revenues were impacted. Subscription revenue growth, on the other hand, also remained impacted due to the NTO related issues. The headwinds are certainly beginning to ease since the slowdown is cyclical and transitory in nature and not a structural one. Although we continue to post moderate growth, the momentum remains slow as the overall sentiment is yet to fully recover.

As a result, we are implementing certain strategic steps in order to enhance our performance in the coming quarters. I want to take this opportunity to reiterate that Zee continues to have strong business fundamentals. The company's intrinsic value remains intact. And I have chalked out a firm and structured plan to bring back our margins to industry beating levels and drive growth for the future.

How I envisage taking the company forward in the coming quarters is centered around 3 key aspects, which are part of our intrinsic DNA. The first being frugality; the second is optimization; and third, but the most important is sharp focus on quality content.

Zee is well equipped for the future with immense capabilities to identify and capture the emerging opportunities in an evolving landscape. We are agile with a strong entrepreneurial spirit, making us the best across the industry. The three-pronged approach I mentioned will elevate and further streamline our existing capabilities in line with our robust growth plans.

Let me briefly touch upon each of these 3 points I just mentioned. Over the last 3 decades, the company has been recognized for its fiscal prudence across the industry. And going forward, there will be a sharper emphasis on frugality with a crystal clear focus on quality and output. Across verticals, including technology, content and marketing, we are implementing steps to optimize spend and enhance the returns on investments. A sound recalibration of the OTT cost structure will be an integral part of this process.

In terms of optimization, our aim is to enhance our productivity by implementing a structured resource optimization drive. This also means enhancing the level of synergies and reduce overlaps between businesses.

On the revenue side, we will take steps to increase the value delivery to our advertisers apart from exploring alternate content monetization avenues. This also includes leveraging the strength and reach of our platforms.

Amidst this, we will continue to maintain a sharp focus on quality content, by streamlining our content creation process for quality output without compromising on the delivery. Quality over quantity will be our mantra going forward. For example, it may result in creation of relatively lesser number of originals if required, but we will ensure that every piece of content we create is superior in quality and captivating for our audiences. We remain optimistic that the results of these structural steps over the next few quarters will start reflecting in the company's performance.

A gradual recovery in margins is expected to reflect from the second half of financial year 2025. We certainly expect the financial year 2025 margins to be meaningfully better than financial year 2024.

My focus is on enhancing the performance of the company to achieve the targeted recovery, and we will remain committed towards fortifying our portfolio and competing effectively in the industry. Our financial year 2026 aspiration will be to target an 18% to 20% industry-leading EBITDA margin profile.

Zee, as a company is well positioned to capitalize the growth opportunities. As a pioneer, Zee has a rich legacy of over 3 decades with a proven content creation expertise across languages and markets. We remain confident that these fundamentals remain unmatched across the industry and the company is well equipped to compete as a major player in the sector. A sector which undoubtedly has significant headroom for growth given the rising income levels.

Content consumption has significant headroom to grow due to lower penetration, favorable demographics and affordability. The sector also offers a conducive infrastructure paving way for long-term growth of the digital ecosystem.

Harnessing the potential of the company of the industry at large, and most importantly, with the continued trust and support of our shareholders, I remain certain that Zee will return to its strong operating levels, generating higher value for all our stakeholders. A steady-state aspiration will be to target 8% to 10% CAGR revenue growth with digital business growing at a much faster pace. Over the years, all our efforts have been ensured that the shareholders' interests are protected, and I seek their faith in our abilities as we implement the strategic steps for a better tomorrow.

On that note, I'd like to hand over the call to Rohit to share the financial and operating metrics of our performance in the third quarter. I look forward to interacting with all of you during the Q&A session later.

Thank you. Over to you, Rohit.

[Rohit Gupta, executive]

Thank you, Punit. Good evening, everyone, and great to connect with all of you. I will briefly touch upon some of the key financial highlights.

Quarter 3 FY '24 was a steady quarter wherein festive season strength was partially offset by ticket. During the quarter, we saw some gradual pickup in ad spending led by FMCG. As a result, our ad revenues were up 4.9% quarter-on-quarter. The pace of ad spend recovery is still muted, and that reflects in Y-o-Y comparison, wherein ad revenues are still lower by 3.4%. While we have seen some recovery in the last few months, many of our large FMCG brands are still circumspect on volume recovery and rural demand and hence, we will continue to be cautious in the near term on pace of ad revenue growth.

With NTO 3.0, having enabled TV subscription revenue growth and step up in ZEE5 subscription, our subscription revenues continue to inch up. And for YTD FY '24 are up 9% year-on-year. TV industry landscape remains healthy and TV viewership is at its peak in the past 9 quarters.

Our broadcasting business remains healthy, and 78% of Zee's portfolio has gained share in FY '24 YTD. We have gained 40 bps share in FY '24 YTD compared to same period last year, and Zee has had highest share growth amongst all networks. Zee is fastest-growing network in South, has widened its reach over its competitor in each region and has consolidated its leadership in Hindi movies and Marathi movies.

Zee TV and Zee Marathi remains 2 large opportunities for network share gain, which we are working on. Encouragingly, Zee Marathi has shown some green shoots post intervention in December and January. In quarter 3 FY '24, our viewership share performance was impacted by Cricket and it came at 16.5%.

On digital side, ZEE55 continues to make progress in line with our strategic priorities. ZEE5 continues to grow at a healthy pace, and during the 9-month period, ZEE55 revenues were up 31% year-on-year. Driven by prudent cost management, ZEE5 quarterly EBITDA loss has further narrowed by INR 99 million quarter-on-quarter. ZEE5 quarter 3 FY '24 revenue were up 14.9% year-on-year and declined 15.8% quarter-on-quarter as quarter 2 FY '24 revenues were aided by a digital syndication deal.

Our original content continues to resonate well with viewers and we released 19 shows and movies, including 5 originals during the quarter.

Coming to the movie business. During quarter 3 FY '24, Zee Studios released 6 movies, 3 Hindi and 3 regional, with 12th Fail, Khichdi 2 and Naal 2 being some of the headline names.

Other sales and services revenues declined 36% year-on-year on the back of fewer number of movies produced and released. This revenue is lower 83% quarter-on-quarter as quarter 2 FY '24 revenues were aided by strong box office performance of Gadar 2, Bro, and King of Kotha. Given the nature of movie business, there is always going to be some quarterly peaks and troughs.

Our music business, Zee Music Company continues to be #2 music channel with over 146 million subscribers of YouTube, and over 41 billion total video views during the quarter, driven by ZMC new-age music catalog and rich library.

Now moving to cost and profitability. In quarter 3 FY '24, overall operating costs declined by 12.8% quarter-on-quarter due to lower content costs, fewer movie releases and continued cost optimization in ZEE5. Given our business has high operating leverage, despite effective cost management, EBITDA margins have declined to 10.2%, down 340 bps quarter-on-quarter and down 720 bps year-on-year due to adverse operating leverage on lower revenue.

PAT from continued operation for the quarter came in at INR 533 million. Net profit for the quarter and year was impacted by merger expenses related exceptional item, which for quarter 3 stood at INR 603 million.

On balance sheet side, our focused efforts have enabled us to further strengthen our liquidity and financial position. During the quarter, we generated strong FCF driven by optimization of working capital. The cash and treasury investments increased during the quarter, and as of December '23 stood at INR 8,286 million, which includes cash balance of INR 6,166 million and fixed deposits of INR 2,120 million.

Our continued -- our content inventory continued to decline in quarter 3, driven by optimized acquisitions. December '23 content inventory advances and deposits were at INR 75.2 billion, lower by INR 4.4 billion on YTD basis. Also, receivables from DISH has been fully normalized and past dues has been all caught up.

Now a bit of color on road ahead. As we embark on this new phase as a stand-alone Zee, we are confident about our longer-term growth prospects and headroom for margin improvement given our broad content portfolio, diversified offerings and margin improvement levers in our business. While our recent performance has been subdued, a large part of this has been due to temporary and transitory factors and the structural strength and attractiveness of our business is still very strong, giving us confidence on our recovery path.

Please do keep in mind that it's just been barely 3 weeks since we have started to revisit our plans as stand-alone Zee and we are still working through all the details. Hence, what we are putting out is an aspirational view based on our initial assessment, it's not a formal guidance.

Our steady-state aspiration will be to target 8% to 10% overall revenue CAGR with the current portfolio and to get back to 18% to 20% industry-leading EBITDA margin profile in a stable macro environment. While we will somewhat depend on macro recovery for overall revenue growth, we still have a better degree of control on our cost structure, and we are revisiting with the frugality and fiscal prudence mindset. There are several identified cost levers.

However, there will be onetime cost and lead time associated in implementing these interventions. As a result, for the next 3 to 6 months, we will likely have some pressures on margins due to incurring onetime higher costs towards implementing these interventions. As we come out of that space, beginning H2 FY '25, we expect to see gradual margin improvement, and we will continue to build on that foundation with an aim to get a steady state 18% to 20% EBITDA margin aspirations by FY '26. Back to you, Mahesh.

[Mahesh Singh, executive]

Thanks, Rohit. Sagar, we can open the call for questions and answers. Would you give the instructions?

[Operator]

[Operator Instructions] The first question is from the line of Abhishek Banerjee from ICICI Securities.

[Abhisek Banerjee, analyst]

Couple of questions from me. First of all, so given where the agreement with Sony seems to have fallen through. As of now, what is the state of the company in terms of people retaining -- I mean, are you being able to retain people? Or is the attrition coming high over the last 15 days or a month or so? And when you were talking about margins slipping, do you mean that margins will remain at current levels? Or do you think that it will come down from current levels also as you implement your plan? And then [ will Zee ] come back to current levels in H2 FY '25?

[Punit Goenka, executive]

Yes, Abhisek, thank you for that. No, we have not seen any attrition in the last 15 days or 3 weeks since we've received the termination notice from Sony. But as we talked about frugality, tightening our belts on manpower also will be part of that plan going forward. Not to say that I'm saying that there are going to be large levels of layoffs, but we will have to see which are the overlaps in my opening remarks that I talked about between businesses. .

Second point on the question of the margins. As Rohit said, that it's been just 3 weeks since we've been evaluating our plans to move forward on a stand-alone basis. So please do give us some more time to come back to you with more detailed color, which we should be able to do within a matter of next couple of months and give you a far more detailed analysis of that.

[Abhisek Banerjee, analyst]

Understood. And just one last question with regards to the rights to the ICC events. You have given that your counsel believes that you do not have any liability, because there were some lapses on the part of [ Star ]. But they will become a much more well-capitalized business as of now the way things seem to be panning out. So if you could give us some clarity on what kind of lapses have happened on their part that would give us some comfort.

[Punit Goenka, executive]

Abhisek, that's not something that I would like to comment on at this -- on this call. All points pertaining to this matter have been elaborated in detail in the notes to the accounts that we have just published. I understand you may not have had enough sufficient time to go through those. But for now, I would request you to refer to the same for more clarity. I would not be in a position to offer any further comments on that.

[Operator]

Mr. Banerjee, do you have any further questions?

[Abhisek Banerjee, analyst]

That's all.

[Operator]

The next question is from the line of Abhishek Kumar from JM Financial.

[Abhishek Kumar, analyst]

And Punit, good to see a resolute guidance, given the circumstances. My question is on the strategy going forward. It seems like the complete reset for Zee. So one, some of the initiatives we had taken around sports, ILT20, et cetera. Any rethink on that line? That's point number one.

And point number two, on margins, if you can break it down into the margins for linear business and for OTT, because we have seen even in our own past the linear TV margins were in mid-30, and even globally and in different parts of the world, you've seen this to be a much more profitable business. So 18%, 20% margin looks -- I mean, it's obviously much better than from where we are. But it looks like we can do better. So any thought in terms of -- or any color in terms of how we are thinking about linear business versus OTT margin in our guidance?

[Punit Goenka, executive]

Yes, Abhisek. So as Rohit talked about the fact that 78% of our current business comes from the linear vertical. Obviously, the margins would be skewed in favor of that vertical going forward as well. But we have demonstrated over the last several quarters that Zee investments in the OTT business have already peaked. And you can see that the margin profile there is improving. In terms of the loss quarter-on-quarter is coming down, even if it's just marginal or not. So from that perspective, it will be a combination of the 2.

And also, lastly, as I again mentioned in my opening remarks, frugality will be a key thing. Your first question on the sports business, et cetera, I think Zee will be relooking at the entire portfolio of the business to see which is the businesses that will add maximum value to our portfolio going forward. And therefore, what we need to focus on and what we do not focus on going forward.

[Abhishek Kumar, analyst]

Sure. Maybe just one quick follow-up on the margin question. So from our modeling perspective also, what comes first? I mean do you see growth to be a precursor for the margins to go up to 18% to 20%? Or irrespective of the growth over the next 1, 1.5 years, we are confident of taking up the margin to our exploration level?

[Punit Goenka, executive]

I think that level of detail you can probably take offline with Rohit and Mahesh, Abhisek. Rather than getting into this, I think we can move on from here for now.

[Operator]

The next question is from the line of Jinesh Joshi from Prabhudas Lilladher Private Limited.

[Jinesh Joshi, analyst]

Am I audible?

[Operator]

Yes, Jinesh.

[Jinesh Joshi, analyst]

Yes. My question is surrounding the new RIO copy, which was filed recently. So just wanted to check if the revised pricing is into force or not. And if yes, what is the average price hike across bouquets? And in that context, how should we see the subscription revenue growth for the next couple of years?

[Punit Goenka, executive]

So did I understand it correctly whether you were asking whether sport has been factored into price...

[Jinesh Joshi, analyst]

No, sir. The new revised interconnection offer which was supposed to come into force from 1st of Feb, the revised pricing on our bouquet, that is what I was speaking about.

[Punit Goenka, executive]

So I think the average price increase across the bouquet is between 6% to 8%. It varies from market to market. And we are working towards achieving that going forward from there.

[Jinesh Joshi, analyst]

Got that. Sir, one last question from my side. I don't know if I should be asking this. But is it possible to list out 1 or 2 critical conditions that were not being met which led Sony to pull out?

Because if I recollect properly in the exchange notification that we had submitted, you had made your stance clear with respect to the CEO candidature. So is there something more to it, which you want to call out, especially with respect to critical conditions?

[Punit Goenka, executive]

I think that best-suited person for that is Sony to answer. And whatever they have claimed in their termination notice, we have responded to that. And it is available in public domain for you to have a look at.

[Operator]

[Operator Instructions] The next question is from the line of Arun Prasath from Avendus Park.

[Arun Prasath, analyst]

On subscription revenue, we see in the 9 months, there is around INR 230 crores incremental -- absolute incremental growth on subscription revenue. Is it largely coming from the ZEE5 revenue growth?

[Punit Goenka, executive]

Rohit?

[Rohit Gupta, executive]

It's a mix. So part of the growth is, of course, like I said in the opening remarks, it's coming from ZEE5 subscriptions going up. Part of it is also with NTO 3.0, now that it has been implemented, so that has also contributed to the overall subscription growth. So it's a mix of both linear and digital subscriptions growing.

[Arun Prasath, analyst]

All right. So this -- we are -- the NTO 3.0-related impact, can you just separately call out how much is that? Rough calculation tells me it's around 3 to 4 percentage. Is it in the vicinity of that?

[Mahesh Singh, executive]

We haven't given the splits on that...

[Punit Goenka, executive]

Yes, but it will be broadly around that...

[Arun Prasath, analyst]

Right. Right. And this, we expect going by our increase in the [ tariff ] rates that is bouquet rates. This can be substantially more around 6% to 7%. Is that the right understanding?

[Punit Goenka, executive]

As I've always guided that it'll be in the mid- to high single-digit kind of numbers going forward.

[Arun Prasath, analyst]

All right. But that never materialized, except for the -- this year. So that's why we are asking, specifically. .

[Punit Goenka, executive]

Yes...

[Mahesh Singh, executive]

No, I think If you look at Arun, our subscription revenues have been growing in high single digits, closer to 10% sort of range, even when we look at this 9-month growth, which you alluded to, that's a 9% number. You look at the quarter year-on-year, that again is a 9% to 10% kind of adjusted growth number.

So the TV doing mid-plus single-digit kind of number has been there. And then, of course, that gets a lift from digital growing at a faster pace.

[Arun Prasath, analyst]

Okay. Right. All right. All right. Just secondly, on the -- if I again exclude ZEE5 numbers and look at the -- see linear TV on its own, our margins are around 24, 25 percentage kind of absolute lowest in the last maybe after the March there -- March, I understand, but for a festival quarter, I don't remember linear TV delivering this kind of margins. So is it -- I mean something one-off is there or its -- or we spent more than what we are supposed to, how should we look at this?

[Punit Goenka, executive]

No, I think the 2 reasons that we alluded to and Rohit talked about in the beginning itself, that because large part of our portfolio operates in the heartland markets, which is yet to see the recovery from the largest segment of advertisers, which is FMCG in our case is one reason for this -- thing to happen.

And the second part is, of course, the fact that we had some marquee sports properties in Q3, which have also eaten into some part of the [ portfolio ].

[Operator]

The next question is from the line of Arun Malhotra from CapGrow Capital.

[Arun Malhotra, analyst]

I think this post [ Zee-Sony ] fallout of the merger...

[Operator]

Sorry to interrupt, Mr. Malhotra, there was a disturbance from your line. Could you please repeat?

[Arun Malhotra, analyst]

Yes, yes. I think post the fallout of the merger, do we see -- [Technical Difficulty] do you see any additional impact of interest...

[Operator]

Mr. Malhotra, once again, your line has a lot of disturbance. Your voice is not coming clear.

[Arun Malhotra, analyst]

Yes. Am I audible now? Am I audible now?

[Operator]

It's a bit better, sir.

[Arun Malhotra, analyst]

Yes. So I was saying post the fallout of the [Technical Difficulty] merger, [ is there any of ] interest between the minority shareholders and the promoter because the promoters hold only 4%. That's one. And second part of it is, is the promoters -- are the promoter family planning to increase their stake?

[Punit Goenka, executive]

Arun, actually I don't think this is a forum to discuss what the promoters alignment towards this is going to be on the stake side. Some [ company's ] disclosure has already been done from some of the promoters of the company. I -- on your first part of this alignment between minority shareholders and the promoters given that the promoters only have 4%. I have not heard of anything yet. But certainly, if the minority shareholders are unhappy with the promoters in any manner whatsoever, we are always happy to openly discuss, debate and address their concerns, whatever those might be.

[Arun Malhotra, analyst]

Sure. No, I fully appreciate, but that's very clear that the markets -- these shareholders are unhappy with what has happened. And whatever has happened is not [ something ] of the minority shareholders. And most of them are clueless as to what were the 2 or 3 critical points why the merger did not happen? Despite till the last moment, the management, maintaining that we are meeting all these merger conditions and the merger should go through.

[Punit Goenka, executive]

I think I've already spoken about that, Arun. So I don't know how much more we can dwell into that. We will have to go with the matter being subjudice and let the law play out, whatever -- however it plays out in that manner.

[Arun Malhotra, analyst]

Okay. Lastly, do you foresee -- in terms of business, do you foresee '25, '26 to be much better, as you said. Would there be more concrete plans that could be shared with the shareholders -- just to give them more confidence that the Zee in the new avatar is much better than what it could have been with...

[Punit Goenka, executive]

Absolutely, we will sharing more concrete plans with you hopefully, by within the next couple of months itself in our -- during the first quarter itself, and not just '25, '26, but even '24, '25 will be better than '23, '24 in my view.

[Operator]

The next question is from the line of Manoj [indiscernible] from [indiscernible].

[Unknown Analyst]

I got two specific questions. Before that, let me compliment you, Punit, and also Sanjay Pugalia for the excellent Tweets Jai Shree Ram, an excellent tuning. I am sure it heralds a new future ahead for the organization and for the industry. Now can I come to two specific questions?

[Punit Goenka, executive]

Please go ahead, Mr. Manoj, yes.

[Unknown Analyst]

Yes. One is this -- the deal with a Japanese company, Sony was done on 21st of December. Before that agreement was done, due diligence was done, and then binding agreement was signed. At that time, the valuations in the market was quite low. After that, the market has grown, valuation of Indian market has improved for obvious reasons, the whole world is aware of that. So aren't we selling the company, our stake very cheap. When market has gone up over 50%. So the valuation on a comparative basis should be much higher, particularly since the market share has also gone up, and our performance is far better than the rivals.

Everybody knows the [ operating ] condition of Disney losing subscribers and losing profits and also Network18 huge losses and no significant increase in market share. So our valuation should be much, much higher on a relative basis. And we all know, talented and beautiful bride always has unlimited suitors. So why just rely on one company at a lower valuation, when who is who of industry, whether it is Birlas or Mahindras, everybody wants entry in the media sector.

It is essential for business and political reasons. I'm sure if conversations are held, you will get much, much better valuations by giving them small stakes and that will drive the opportunity, shareholder wealth creation. I would like to have your insights and thought process on this.

Second point is there was a talk on creeping acquisitions statement was made, whenever promoters or the associates have mentioned about creeping acquisitions and when transaction start even a small transaction, it kicks off valuation. So when is it still happening? We have seen many industries, corporates where creeping acquisition started, they are multiplied by at least 3x. Many examples are there for that. So what's your thought process on this creeping acquisition happening and quick time and when we'll be having this and so we can also easily get if not 3x, maybe 2x in the next few months, these are the triggers the whole market appreciates.

We are very happy with your informal guidance of 18% margins. And I hope in the financial models of all A-Class analyst, when they consider this and a conservative growth of 8% to 10%, you have mentioned, the whole models then the re-rating will happen.

Look forward to a detailed response from you on each of these 3 points. And hats off to you. Keep Tweeting. We look forward to your Tweets.

[Punit Goenka, executive]

Thank you very much, Manoj, for your kind words for the Tweets. And secondly, on your first point, again, let me thank you for your confidence in the company's potential valuation going forward. And I'm certain with shareholders like yourselves and your confidence on the company, we will achieve much higher heights going forward. So we will continue to work towards building shareholder value, come what may.

On the creeping acquisition, Manoj, I have already commented that, that's a promoter subject. Today we are here addressing the quarter 3 results of Zee. And I think some of the promoters have already made their intent public. Beyond that, I will not be in a position to comment here in terms of either the timing or the quantum of the creeping acquisition. Thank you very much, but for your call...

[Unknown Analyst]

Can I speak on one small observation in the help of all shareholder interest -- of all stakeholders.

[Punit Goenka, executive]

Please do.

[Unknown Analyst]

Yes. One important point is there are rivals who are using proxy advisers and using unethical means against the interest of the company, and also in the cases of shareholder -- directors appointment. We are very concerned it may happen in the future. We should ensure by proper complaints against regulators that proxy advisers should not misuse their position and everybody is aware, maximum unethical means are used by rivals. And most of them are quite weak.

A few -- amounts here and there make a big difference compared to the net network of those proxy advisers and end users connected. And some of them may be bureaucrats, past bureaucrats also. So this is an observation. If some action is initiated proactively initially, it will help the corporate and industry significantly.

Not only that, it will also help the Industry Minister's FDI goals. He has mentioned FDI goal is slipping. And not to worry, in the future, it will be made up. One of the main reasons for fall in FDI is that this transaction, where FDI was expected much, much earlier. So I'm sure Punit, Piyush Goyal will also be disappointed with the Japanese company's step for their own agenda. And with this, I wish you all the best.

[Punit Goenka, executive]

Thank you very much, Manoj. Thank you.

[Operator]

As there are no further questions from the participants. I will now hand the conference over to Mr. Mahesh Pratap Singh for closing comments.

[Mahesh Singh, executive]

Thank you, Sagar. Thank you, everyone, for joining us today. We hope all your questions were answered. Do feel free to reach out if you have any follow-up questions or if your query remains unanswered. We will be available and look forward to speaking to you next quarter. Thanks so much, and have a great evening.

[Operator]

Thank you. On behalf of Zee Entertainment Enterprises Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.