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- 06 Nov 2024
- ICICI Securities
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SAREGAMA: WEAK PERFORMANCE
News: Saregama reported weak performance on margins and earnings front. Revenues were up 40.3% YoY, at ₹ 241.8 crore, largely boosted from new acquisition consolidation and strong TV and Films business. Music segment was down ~2.6% YoY at ₹ 153 crore. Carvaan sales volumes were down 42.9% YoY to 1.08 lakh units with revenues at ₹ 21.2 crore, down 41% YoY. The licencing revenues at ₹ 132 crore was up 9% YoY. The TV & Films segment revenues were up 378% YoY at ₹ 72 crore, also aided by consolidation of Pocket Aces. EBITDA was flat YoY at ₹ 60.8 crore with EBITDA margin at 25.2%, down 10 percentage points YoY, given the revenue mix, and higher content charges. Operating margins (excluding content costs) was also dismal and down 763 bps YoY at 34.1%. Consequent PAT was at ₹ 44.9 crore was down 6.7% YoY.
Views: We expect digital monetisation to provide sustained growth momentum along with new releases which should drive growth ahead. Synergy from Pocket Aces and accelerated opportunity fructification in new areas like Web Series, Artist management, etc., can provide further growth leg. Nonetheless, we await management commentary on licensing revenues outlook and margins ahead and commentary on likely impact of Wynk closure on licencing revenues.
Impact: Negative