India’s Zee Entertainment Enterprises reported a sharp rise in third-quarter profit and margins on Thursday, boosted by cost cutting measures which offset lower advertisement revenue.

Zee reported a profit of Rs. 1.64 billion ($18.96 million) for the three months ended December 31, compared to Rs. 585 million a year ago, a Reuters report yesterday stated.

Its subscription revenue rose 6.6 percent to Rs. 9.8 billion, benefiting from the implementation of a 2022 tariff order, which gave broadcasters more leeway to increase prices of TV channels.

However, ad revenue declined 8.5 percent, due to what the company described as a “sluggish festive season” that resulted in lower marketing spend by consumer facing companies. As a result, total revenue declined three percent.

With recovery in ad revenues still elusive, the company has in recent quarters sharpened its focus on cutting costs and reducing losses in its streaming business Zee5.

Zee reported third-quarter core profit margin of 16.1 percent compared to 10.2 percent a year ago. It has said it is targeting a margin of 18-20 percent by fiscal year 2026.

Its operational costs declined 16 percent year-on-year driven by lower programming and technology cost, while total expenses fell 10 percent. Meanwhile, core losses in Zee5 narrowed to Rs. 1.36 billion from Rs. 2.4 billion a year ago, and revenue rose 8 percent as it attracted more paying customers with a new slate of content.

According to a press release put out by Zee Entertainment, the company’s streaming service Zee5 had a healthy YoY growth in usage and engagement metrics during the quarter.

Though Zee5 revenue growth during the quarter was impacted due to delay in the renewal of a B2B deal, the company said renewal discussions are underway. Fourteen shows and movies were released during the quarter including seven originals.

Meanwhile, the Reuters report added that India’s $28 billion media and entertainment sector has witnessed intense competition in recent years, with the likes of Netflix and Sony striving to strengthen their foothold.

Zee previously said that the merger of media assets of Reliance Industries and Walt Disney would likely give the combined entity more advertising leverage due to their larger market shares.