💰 Financial Performance

Revenue Growth by Segment

Revenue from Operations reached INR 230 Cr (Rs. 2,300 Mn) in Q2 FY26, representing an 11% QoQ growth. The music segment provides steady growth through daily streaming on platforms like Spotify and YouTube, while the video/films segment is lumpy with revenue booked upon release. The company targets a 30% CAGR for revenue (excluding Carvaan) between FY24 and FY27.

Geographic Revenue Split

Not disclosed in available documents, though the company notes significant activity in South Indian language markets and maintains a national presence through its Kolkata headquarters and Mumbai corporate office.

Profitability Margins

Profit Before Tax (PBT) rose to INR 60.1 Cr (Rs. 601 Mn) in Q2 FY26, a growth of 18% QoQ. The company maintains an annual adjusted EBITDA margin guidance of 32% to 33%. The video business is currently operating at a break-even level to support lower-cost music acquisition.

EBITDA Margin

Adjusted EBITDA margin is guided at 32% to 33% for the full year. This high margin is sustained by the high-margin licensing of the company's legacy music IP, which offsets the lower-margin video and Carvaan hardware segments.

Capital Expenditure

The company utilizes surplus funds and internal accruals for new content creation in films and TV serials. While specific INR Cr for FY26 is not stated, the company previously raised funds through a QIP in FY22 (allotting 18,50,937 shares) to fuel content acquisition and expansion.

Credit Rating & Borrowing

CARE Ratings reaffirmed a 'CARE AA-; Stable' rating for long-term bank facilities (INR 101.50 Cr) and 'CARE A1+' for short-term facilities (INR 3.50 Cr) as of August 2025. The rating reflects a robust capital structure and strong debt coverage indicators.

⚙️ Operational Drivers

Raw Materials

Music rights acquisition costs (100% of content cost), which are managed under a strict 5-year payback period policy to ensure Return on Assets (ROA).

Import Sources

Content is sourced domestically across various Indian languages, with specific mention of volatility in South Indian language rights pricing.

Key Suppliers

Film producers and independent music creators; the company also produces its own films to acquire music rights at a 'much lower price' compared to market rates.

Capacity Expansion

Digital footprint expanded to 400 million followers/subscribers across YouTube, Instagram, and Facebook. Artiste management vertical now handles 230+ artistes, adding 18 new artistes in the recent period.

Raw Material Costs

Acquisition costs for music rights vary by language; one South Indian language recently saw costs 'go up very high' before falling. The company refuses to acquire content if the projected payback exceeds 5 years.

Manufacturing Efficiency

Not applicable; however, the video business is used as a strategic tool to secure music IP at lower costs, effectively acting as a vertical integration efficiency.

Logistics & Distribution

Distribution is primarily digital via streaming platforms, minimizing physical logistics costs except for the Carvaan hardware segment.

📈 Strategic Growth

Expected Growth Rate

30%

Growth Strategy

Growth will be driven by a 30% CAGR in non-Carvaan revenue through aggressive investment in new music content, expansion of the artiste management vertical (now 230+ artistes), and the 100% acquisition of Finnet Media to capture the influencer marketing space. The company is also leveraging its 'video-to-music' strategy where producing in-house films secures music IP at lower costs.

Products & Services

Music licensing (digital and broadcast), Carvaan (portable audio players), TV serials (primarily Tamil), Films and Web Series (Yoodlee Films), and Artiste/Influencer Management.

Brand Portfolio

Saregama, Carvaan, Yoodlee Films, Pocket Aces, Finnet Media.

New Products/Services

Expansion into influencer management via Finnet Media, which is expected to contribute 'handsomely' to revenue and profit within 12 months of the November 2025 acquisition.

Market Expansion

Aggressive investment in South Indian music markets and digital platforms to capture new customers joining the digital ecosystem.

Market Share & Ranking

India's leading Entertainment IP company with the largest music archives in the country dating back to 1902.

Strategic Alliances

Partnerships with global streaming giants like Netflix for film/series distribution and Spotify/YouTube for music streaming.

🌍 External Factors

Industry Trends

The industry is shifting toward 100% digital consumption. Saregama is positioning itself as a 'content-IP' company rather than a music label, diversifying into influencer management to capture the shift in brand advertising toward social media creators.

Competitive Landscape

Competes with other major music labels and film production houses for rights; maintains an advantage by producing its own films to secure music IP cheaply.

Competitive Moat

The moat is built on a massive library of 100+ years of music IP (since 1902) which cannot be replicated. This is sustained by a disciplined 5-year payback rule for new acquisitions, ensuring the library remains profitable and growing.

Macro Economic Sensitivity

Highly sensitive to digital data penetration and smartphone adoption in India, which drives the consumption of music and video content.

Consumer Behavior

Increasing trend of 'social media music usage' and influencer-led marketing, prompting the acquisition of Finnet Media.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with SEBI Listing Obligations and Disclosure Requirements (LODR) 2015 and the Companies Act 2013. Revenue recognition is subject to complex contractual terms for license fees, requiring strict audit oversight.

Legal Contingencies

The company has disclosed the impact of pending litigations as of March 31, 2025, in Note 36 of its financial statements. No material foreseeable losses were reported on long-term or derivative contracts.

⚠️ Risk Analysis

Key Uncertainties

Obsolescence risk of distribution formats and the threat of piracy/copyright infringement which can impact IP valuation by an undisclosed percentage.

Geographic Concentration Risk

Heavy reliance on the Indian market, particularly the regional language film industries for new content acquisition.

Third Party Dependencies

High dependency on digital platforms (YouTube, Spotify, Instagram) for content monetization and reach.

Technology Obsolescence Risk

Risk associated with hardware products like Carvaan as consumer preferences shift entirely to smartphone-based streaming.

Credit & Counterparty Risk

The company maintains strong receivables quality, with auditors testing revenue recognition from license fees against third-party customer information.