Zee to Allocate 40% of Free Cash Flows to Core Business Projects

Zee Entertainment Enterprises intends to devote 40% of its free cash flow (FCF) to growth capital for regional content, music, digital platforms, and international expansion, according to its most recent strategic roadmap shared with investors.

In its investor presentation, Zee stated that it will set aside 25-30% of net profit for dividends. It will also devote 5% of its growth capital to research and development in content creation.

In FY25, ZEEL reported a net profit of ₹679 crore and a normalized FCF of ₹882 crore, representing 1.3 times its profit. As of March 2025, cash and equivalents totaled ₹2,400 crore.

The company stated that its investments would primarily focus on core business areas, with a target payback period of 2-3 years and active board participation in evaluating opportunities. Zee has identified several growth opportunities, including syndication, user-generated and short-form content, improved monetisation on its OTT platform ZEE5, and deeper engagement with regional audiences. The strategy also includes unified content creation across TV and digital platforms, with efforts to scale both long- and short-form formats.

Additional focus areas include expanding its direct-to-consumer (D2C) and intellectual property (IP) offerings, increasing content in films and music, and venturing into new areas such as live events.

ZEEL also stated that it would improve corporate governance, strengthen its HR policy framework, and assess value-enhancing M&A opportunities to support scalable growth. "We are building on this solid foundation to fuel future growth by balancing investments with a healthy margin profile. Our efforts will continue to focus on sharpening content, increasing reach across platforms, and improving monetization through existing and newer channels," Zee Entertainment CEO Punit Goenka said during the company's Q4 earnings call on May 8.

In FY25, ZEEL's advertising revenue fell by 11%. To offset the softness in ad revenue, the company intends to broaden its client base by doubling contributions from retail advertising by FY28.

The company stated that this will include structured ad deals involving equity partnerships, as well as localised advertising strategies like geo-targeting and influencer-based campaigns.

The company is also working to increase leadership capacity through internal promotions and targeted external hiring. ZEEL is expanding its ad sales team and appointing Chief Business Officers for syndication, short-form video, user-generated content, and gaming.

The company has 2,500 employees and laid off 15% of them last year as part of a cost-cutting exercise.