Zee Media (NSE:ZEEMEDIA) Is Making Moderate Use Of Debt

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, Zee Media Corporation Limited (NSE:ZEEMEDIA) does carry debt. But the real question is whether this debt is making the company risky.

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Why Does Debt Bring Risk?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.

What Is Zee Media's Net Debt?

As you can see below, Zee Media had ₹1.74b of debt at March 2025, down from ₹2.46b a year prior. However, it also had ₹142.2m in cash, and so its net debt is ₹1.59b.

A Look At Zee Media's Liabilities

Zooming in on the latest balance sheet data, we can see that Zee Media had liabilities of ₹5.02b due within 12 months and liabilities of ₹1.58b due beyond that. On the other hand, it had cash of ₹142.2m and ₹2.03b worth of receivables due within a year. So it has liabilities totalling ₹4.42b more than its cash and near-term receivables, combined.

This deficit isn't so bad because Zee Media is worth ₹7.74b, and thus could probably raise enough capital to shore up its balance sheet, if the need arose. However, it is still worthwhile taking a close look at its ability to pay off debt. When analysing debt levels, the balance sheet is the obvious place to start. But it is Zee Media's earnings that will influence how the balance sheet holds up in the future. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

View our latest analysis for Zee Media

In the last year Zee Media had a loss before interest and tax, and actually shrunk its revenue by 6.8%, to ₹6.3b. We would much prefer see growth.

Caveat Emptor

Over the last twelve months Zee Media produced an earnings before interest and tax (EBIT) loss. Indeed, it lost a very considerable ₹1.3b at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. We would feel better if it turned its trailing twelve month loss of ₹1.2b into a profit. In the meantime, we consider the stock very risky. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. We've identified 2 warning signs with Zee Media (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.