Zee Entertainment Enterprises Ltd (ZEEL)'s operational performance during the third quarter surpassed estimates by stock analysts even as its profit dropped owing to the exceptional gains made in the same period a year ago.

On BSE, the stock moved up 6.4% to close at Rs 459.20 on Wednesday.

The company's revenue rose 24.5% year on year (yoy) to Rs 1,976 crore, higher than the Rs 1,848 crore consensus estimate. Net profit, however, fell 38% yoy to Rs 386 crore in the quarter, a shade below the Bloomberg consensus estimate of Rs 400 crore.

The company had reported an exceptional gain of Rs 134.6 crore in the year-ago period due to the sale of its sports broadcast business.

"Our broadcast business continues to grow at an impressive pace as evident from the domestic advertising and subscription revenue growth numbers. We continue to consolidate our viewership share," said ZEEL managing director and CEO Punit Goenka.

Going forward, the advertising and subscription revenue growth will be aided by the scaling-up of digital business and the growth outlook for both remains strong, said Goenka.

As per ZEEL's exchange filing, the operating income (the earnings before interest, tax, depreciation and amortisation) has seen a 37% y-o-y jump to Rs 653 crore during the quarter, way above the estimated Rs 577 crore. The operating margin expanded to 33% from 30.1% a year ago.

Analysts are pleased with the better-than-expected advertisement revenue and higher operating margins. "The management also sounds confident on the growth of its digital platform, ZEE5," Angel Broking's Mayuresh Joshi was quoted as saying.

STRONG SHOW

• Revenue rose 24.5% yoy to Rs 1,976 crore  
• Subscription revenue at Rs 608.2 crore, registering a growth of 21.3%  
• Operating income jumps 37% yoy to Rs 653 crore