BLOG
Hidden Gems Saregama India - Proxy play on thriving music industry
Saregama India (Saregama) is India’s oldest music label owned by RPSG Group with ~1.6+ lacs songs, which is monetized over various formats such as digitals (streaming, YouTube), physical (Carvaan) and television
Strong medium-term outlook in Music Segment: The management has guided for ~30% revenue growth (excluding Carvaan) over the next 3-4 years, with licensing revenue (B2B) growth at 23% CAGR, led by higher share in new content across Hindi and regional languages. We estimate ~21% CAGR in B2B (licensing) music sales in FY24- 27E to ₹ 939 crore, as monetisation of existing IPs via digital platforms and new music acquisition will drive growth
Profitability growth to be back ended: The management highlighted that growth may be slower for next 4-6 quarters as it ramps up content acquisition. Nonetheless, it expects the profitability CAGR to outpace the topline growth thereafter. After muted FY25, we expect reported EBITDA margins to bounce to 31.5% by FY27 vs. 30.7% in FY24, resulting in 23% earnings CAGR over FY24-27E.
We have a positive view on Saregama India as we expect digital monetisation to provide sustained growth momentum. We assign a BUY rating, valuing it at a target price of ₹ 610, with a multiple of 36x P/E on average of FY26E & FY27E EPS
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
Related content
Blogs
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Video
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.