There are many questions which are needed to be clarified before coming on the conclusion such as
1)will ril will buy all pictures right or selected
2)what actions will be taken by pvr and inox to counter it, can something favorable come from that for shemaroo
3)if all the right of movies will be bought by jio then will it become content aggregator and sell to tv channels ( opening a new business for jio )
Reliance will kill all such small companies. Reliance Jio is elephant and has strong capital backing, such small company will get exhausted very soon. Very low Probability for better return
No, at present it canât be said, since shemaroo has already done its investment secondly jio will also showcase other stuff such as Amazon Prime videos and Netflix there shemaroo can get its place and show case its stuff
Still it is too early to anticipate, yes i am not denying the fact that we have to closly watch the scenario that how it works out,
From second view point if jio has such aggressive plans shemaroo can be a very good contender for acquisition with the kind of library shemaroo has
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I personally experienced that, sometimes, It is hard to believe reality as we love the stock that we own.
But more headwinds than tailwinds for Shemaroo on the way ahead. Business that need continuous investment to grow where future is not sure and no moat especially in a pond where big fish become mad! Better to believe in market than stock!
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I request seniors @desaidhwanil , @Donald , @dd1474 to guide what can happen (positive and negative) for shemaroo due to announcements made by jio yesterday, since it will definitely going to help investors of shemaroo to take action accordingly
Thanks
The basic premise would be Shemaroo get another medium to share the content with the audience. There could be some canabilisation from other medium to Jio but reach would increase. Also, one need to understand bargaining position of Shemaroo vis RIL which is giant. As we observed in Youtube for Shemaroo, while the consumption increased multifold post Jio launch, same has not reflected in revenue as there was corrospoding decline in CPM for Shemaroo in Youtube.
So prima facie positive as get another medium to reach audience, whether same translate into incremental revenue to Shemaroo, only time would tell us in my limited understanding.
Discl: Continue to hold my investment. However, cautiously watching market development may change my holding without intimation to forum given the attractiveness of other opportunity in context of my risk reward profile. Reader shall do his/her own due diligence before making any investment decision. Not recommendation and view may be biased due to my holding
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When it comes to investing, always remember what Howard Oaks has said about the first level thinking and second thinking. First level thinking is nothing more than consensus, peripheral and shallow understanding of the situation which seems logical to its thinker but is deceptive. Second level thinking is contrarian, deep and emanates from good understanding of the actual realities. It is the second level thinking which makes us the money and wealthy while the first level thinking which make us look smart in the short term only.
I see a lot of comments post Reliance AGM manifesting first level thinking only. I do not think that Reliance Trends for example, has hampered the business prospects of any good large organized player in the supply of apparel. Similarly when it comes to content markets, it is a very large and heterogeneous market - there is enough space for less than USD 100 million revenues companies to grow and flourish if their management is talented and focused.
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Completely agree with you @8sarveshg
If one will see the history of Shemaroo , they have adapted themselves with changing times. It is not a new player in the market which will go out very easily.
One can read the below article which i believe was posted on the forum earlier also.
Today INOX has come up with a media release on Jio Development. It would have to be seen how Jio goes ahead.
Shemaroo has recently walked on the Saregama path and launched itâs Audio Devices for Bhagwat Geeta and Kuran. There is immense scope for launching Similar speaker devices with Bollywood Songs or some Preloaded Devices with Movies in future.
In last few days , it has partnered with Dish TV for Punjabi Content as well as with ixigo
Although , very difficult to value the business. Lets see where it goes. The correction in prices changes the perceptions very fast.
Disc: Biased as Invested , Added more today !
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I fail to understand , how jio will kill shemaroo. the first day first show service jio is launching will rather a killer to amazon,netflix and hotstar. Shemaroo does not have any inventory of new movies. More over jio may provide aggregation of all OTT platforms through which the same shemaroo item can be consumed , So in a way a new avenue or channel is created for consumption.
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This is interesting read on how buffett thinks about media businesses -
https://wordpress.com/read/feeds/59790521/posts/2378812759
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Aggressively spreading towards devotional category to reduce the dependence on movie distribution business.
AGM FY19 Notes:
- Digital is 30% of Revenues. Digital OTT apps contribute 30% of digital revenues => 9% of total revenues
- Zee has highest movie viewership in India. It has close to 25% movie viewership in India. It is an esteemed customer of ours and it is business as usual with them. (This is CEOâs answer when asked if any implication when Zee mentioned they are going big on movies in AR FY19)
- Legal & Professional expenses are rising fast due to establishment of US and UAE entities. There were some litigations as well. We had some additional legal & professional expenses due to new initiatives we are taking
- Low dividend numbers due to ramp up of new initiatives and we need cash for the same
- Consumption slowdown => Ad slowdown => Lower Ad growth for broadcasters => Lower margin deals for Shemaroo
- Plant & Machinery in Balance Sheet attributes to huge amount of technical processing equipment owned by the company
- Company owns two buildings in Marol. We also have another building in Andheri West
- Now-a-days lots of channels show dubbed movie content. This is because TV is mostly consumed by people from lower socio-economic strata and they are driving the TRP. We also have decent dubbed content (not sure if true)
- Airline content business is doing very well. We are the number 1 there. Other players are Eros and <Insert_Name>. <Insert_Name> used to have 85% market share and they dropped to 40% now. (I couldnât take note of <Insert_Name>'s actual name)
- Company is producing some Marathi content but it is very low on numbers. There are three or four other partners as well. Shemarooâs exposure to that is just 1.5 to 2 crores. So ignorable
- YouTube viewership still grows at 30%+
- Marathi regional business seems to be picking up and that is good. Zee is very strong in Marathi content
Discl: Invested from higher levels. Iâm NOT a SEBI registered investment advisor. Please do your own due diligence. Above notes is taken by me during the AGM and doesnât belong to any company.
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stock tanked about 8% towards the evening. As always, there are no secrets in Dalal street and the rats smelled it out before, from the looks of it !!
The result came out at 17.38 officially âŚbutâŚ
PS - no holding
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Definitely seems like insider info leaking out.
I see that the results are decent QOQ looking at the slowdown. It may be subdued YOY, however i see that in the price. The stock is battered too much. I see valuations attractive .
Note: I may be biased and Holding the stock
Point to notice is raising of funds, why are they raising it,probably to lower debt but by way of issuing equity doesnât sound good at present levels.Secondly they are doing many things and investing heavily into human resources only time can tell whether it will favor them or will go against them
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I think it has more to do with notice to raise fund upto Rs 250 cr by Debt/equity. Today there is conference call and would provide more details about reason to raise fund. In current environment, market is very conerative and hence any variance from previous indication is perceived negatively. I assume we shall get some clarity post con call.
Discl: Among my Top 10 holdings, Cautiously evaluating prospects and may change my holding materially in case I am not comfortable with managment commentary on conference call. Not a Recommendation, Not a SEBI registered financial advisor.
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I hope you got the answer for the fund raise. It is a enabling provision. Listened you on Concall. I think one of the two initiatives they are thinking to start is âMukka by Shemarooâ. It seems to be a restaurant business. They are currently operating in Mumbai from Marol and Kandivali under Mukka Brand. Anyone from Mumbai can confirm ?
Do check this
The packaging is innovative. They are sending a Magnet (related to a movie) inside the box as well as a crossword related to movie inside the box along with food. They are available on Zomato , Swiggy , UberEats. Cannot comment more whether it is a good initiative or not. Generally I feel Restaurant business is a godd margin business. Wanted to ask the same on concall but did not get the chance to ask the question.
I think they are very good at innovations. The design of Bhagwat Geeta Portable speaker definitely beats the Caravan. On numbers front , they are at very initial stage and are more pricey as compared to Caravan. They also launched Amrit Vaani recently containing Shabads for Sikh Community. Their Advertisements are visible on Leading News Channels as well as in between the leading Religious shows. Let us see how they move ahead with this. Good article
There is negligible holding of DII while FII holds a large stake. I thought that recent correction in stock prices is attributed to the FII selling but the holdings by FII is increased by 2% from June 2019 levels. Unable to get why the stock prices have taken such a beating. Results are not really this bad. Also no interest by DII is a concern even at this valuations.
Overall I think they are continuously investing in lot of things. They are aggressively buying content due to the availability of content at cheaper prices due to current slowdown. (As Hiren told in concall). Wanted to ask him that since the companyâs valuations are also cheaper , is there a plan by promoters to increase the stake. Though did not get the chance to ask. Donât know how the story unfolds but current correction in stock prices is shaking a lot of confidence.
Disc: Invested
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I am not following Shemaroo lately but a small portion is left in my holdings. Hence, decided to go through results. My first impression :
- Revenue is down YoY. At least this should grew for a small size company when data is cheap and mostly unaffected by slowdown. They picture Indian growth story in investor presentations so colourfully. Still, they are struggling to increase top line.
- PAT halved (margin compression) if adjusted to tax
- No free cash flows since ages and hardly pay dividend. Something or other they adjust so that no cash comes out.
- Yesterday as someone mentioned, the stock is already down 8% before results. Insider trading?
Note : Have minuscule portion, blindly sold today morning as it broke previous support despite huge fall over the year. Will not be hesitant to buy if I feel prospects are good
Their earnings do not much depend on cheap data as of now. In traditional business which is around 70% currently , major earnings is through providing content to Broadcasters. Due to the slowdown in economy , their is a less spend by Advertisers on advertisements and thus broadcasters are trying to get the content at cheaper prices. (Hiren highlighted in concall that few deals were at low margins).
Lots of new initiatives are done by the company and have done investments in People. That may have dented the Bottomline.
I think you have really not followed the company from long. In case I remember , management has guided somewhere in 2017 about free cash flows onwards 2018 due to better monetization and have delivered very good Free Cash in 2018 as well as in positive FCF in 2019.Do not know from where you get the negative data.
On dividend , they are consistently paying dividends and increasing every year. Though the overall Payout ratio is low. We must understand that they would need cash for expansion as well as for debt reduction. Until they are employing the cash at 20+ ROCE , i donât think there is any big issue with respect to dividends. They are into such a business where the content acquisition cost will always remain.
It is been going down from very long. Even fell 20% today. Can not say it is an insider act unless there is a pattern every time before results. Sometimes in speculation of poor performance , stock reacts before results. But yeah , when stock prices fell like this , there are lots of perceptions develops with respect to governance of the company.
It is better to have a deep impression rather than first impression as things may not be what they look like. My opinions are definitely biased due to my holdings.
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