Zee Entertainment share price gains 6% on this business update regarding a strategic partnership: Check details

June 10, 2025 | Mumbai – Shares of Zee Entertainment Enterprises Ltd (ZEEL) surged nearly 6% on Tuesday, following a key business update regarding a new strategic partnership, reigniting investor optimism after a volatile year marked by merger hurdles and regulatory scrutiny.

The stock rallied to an intraday high of ₹209.70 on the NSE, up from the previous close of ₹197.75, marking its best single-day gain in over a month. The broader Nifty Media index also traded in the green, indicating sector-wide optimism.

What’s Driving the Rally?

Zee Entertainment announced in a stock exchange filing that it has entered into a strategic content partnership with a major international streaming platform. While the official name of the partner was not disclosed due to a confidentiality clause, market sources speculate that the tie-up is likely with a leading US-based OTT player, enabling Zee to syndicate and co-produce premium original content for global distribution.

According to the statement, this multi-year deal will allow Zee to monetize its extensive library of Indian content globally, while also co-developing new web series and digital-first films under a revenue-sharing model.

Analyst Reactions: Strategic Clarity Boosts Sentiment

Analysts are viewing the development as a strategic pivot toward digital monetization at a time when linear TV revenues are plateauing.

“This partnership signals Zee’s renewed focus on building digital scale after the collapse of the Sony-Zee merger. It aligns with global trends where traditional media players are increasingly leveraging streaming alliances to expand reach,” said Ravi Menon, media analyst at Elara Capital.

“If the deal execution is strong, it could provide both topline support and valuation upside,” he added, upgrading his stance to “Accumulate” with a target price of ₹225.

Another report by JM Financial noted that Zee could unlock significant foreign currency revenues, especially in markets like the US, Canada, UK, and Australia, where Indian diaspora consumption is growing.

A Comeback Story in the Making?

This business update comes at a crucial time for Zee. After the Sony merger fell apart earlier this year, Zee’s stock plunged over 30% in Q1 2025 amid investor disappointment and management shake-ups. The company has since been under pressure to outline a standalone growth roadmap, especially in the digital space.

The newly announced partnership is being interpreted as Zee’s attempt to rebuild investor trust and regain momentum.

“Zee has a massive content repository, but the key was distribution. This partnership helps bridge that gap,” said Manish Tiwari, senior portfolio manager at Motilal Oswal AMC. “It’s not a complete turnaround yet, but it’s a start.”

Market Context: Media Sector Turning a Corner

India’s media and entertainment sector has been undergoing a structural transformation, with advertisers shifting budgets to digital, and viewers increasingly consuming content on-demand.

Zee’s renewed focus on content licensing and OTT aligns with peers like Viacom18 and Disney Star, both of whom are heavily investing in digital-first strategies.

The Nifty Media index has gained nearly 9% in the last three months, outperforming broader indices, signaling a sectoral rerating driven by rising content consumption and ad-tech innovations.

Investor Outlook: What Lies Ahead

While the latest update offers near-term tailwinds, sustained execution will be key for Zee to regain long-term investor confidence.

“This isn’t just about a single deal. Zee will have to show consistent delivery in digital, improve transparency, and rebuild its financials,” said Sonal Gupta, Head of Equities at Kotak Securities. “The stock may remain volatile but does offer tactical upside for medium-term investors.”

With content monetization cycles typically spanning 12-18 months, the impact on earnings is expected to be gradual but positive. Investors are also watching for updates on:

• Renewed merger discussions or acquisition plans

• Debt reduction roadmap

• Subscription growth in Zee5 and international digital verticals

As of market close, Zee’s market capitalization stood at ₹20,050 crore, with trading volumes more than double the 30-day average, suggesting strong institutional participation in today’s rally.

Zee Entertainment’s latest business update on a strategic content partnership appears to have struck the right chord with the market. While uncertainties around corporate restructuring persist, this move could be the first step in a standalone revival strategy that pivots on digital monetization and global distribution.

For now, the bounce-back in share price reflects renewed investor interest, but the coming quarters will be critical in determining whether this is a short-lived spike or a genuine turnaround story in the making.