Shemaroo Entertainment

(Bheeshma Sanghani, PhD) #166

I know that Shemaroo is growing at a great pace. That much cannot be in doubt. But growth has been the undoing of many a good business. Growth if not supported by adequate returns on capital destroys a lot of wealth. Its like an alcoholic who originally started as a occasional social drinker and over time destroyed his liver and had to go into rehab. Have a look - Shemaroo has a poor median ROA ( net of cash and investments - doesnt have too many to begin with) of 8.20% but it is certainly growing its sales and profits at 18.83% & 30.78%, a fast clip. Thats a lot of growing without any major increase in ROA. Be careful fellas of this somras called growth.

(Hardik) #167

ROCE has been 19-20% since 2012.

(Vijay Gattani) #170

Interesting but net profit is after providing for Interest cost and is only for Equity Shareholders. So in this calculations you may have to add back interest cost to give fair picture.

(Dhiraj Dave) #173

@desaidhwanil @Donald

I have tried to understand major usage of shemaroo content on youtube. First, I compile data for Top 49 video of Shemaroo and other comparable peer from which is as under:

In order to understand Shemaroo usage Content, I tried to check vieweship detail of Major channel of Shemaroo from youtube as on Jan 4, 2017. Column B to Column E in following table are compiled from Youtube. Column F to M are compiled from Column N is conversion of time in minutes. Around 28 of 77 Channel of Shemaroo accounts for 95% of Viewership of Shemaroo on Youtube.

For the Top 10 Channels, I again use data for Top 49 videos of Each channel. Average Time spent on top 490 video (Top 10 channel mutliplied by 49 video for each channel,aggregate accounting for nearly 40% of Total viewership on Shemaroo) is aroud 50 minutes. This shall be viewed in context of average time spent of 10 minutes on Ultra hindi, 5 Minutes for T Series, 4 minutes of Eros Now and ~ 4 minutes for YRF.

So, average Shemaroo viewer (based on 40% of Viewership sample) spent ~ 50 minutes on video of Shemaroo as compared with 5-10 minutes for peer. I need assistance to undestand how would this result in adverstisement revenue for Shemaroo. Also looking forward for viewpoint of any other member who can further analyse the data and assist in better understanding of Shemaroo advertisement revenue.

Dsiclosure: I hold share in the company and increased my holding in last 30 days. Investors are advised to do their own due diligence.

(Praveen K) #174

Competitors in this biz in India…Excerpt from Balaji Telefilms AR FY15-16 Page #30

PS: Balaji though is not looking for acquiring any content.

Disclosure: Not invested.

(hiral) #175

Touchstorm is categorizing the entire YouTube platform, profiling millions of YouTube channels and has created the Touchstorm Video Index Score — TVi for short.
A TVi score is the single measure of the overall health of a YouTube channel on a scale of one to a thousand. It rolls up a myriad of qualitative data points. You can think of it like a FICO score, only for YouTube.
The TVi Score balances the “metrics that matter” to produce one number that represents the healthiest and best performing YouTube channels. To recap, these key metrics are Views, View Density, Subscribers, Subscriber Conversion, Likeability and Best Channel Practices.

Below is the TVi score on the scale of 1 - 1000 for some of the top Shemaroo channels on youtube

Source -

I am trying to figure out how the view counts / subscriptions are translating into revenue. Can we use $1000 per million views as a thumb rule?

Disclosure: Not invested

(Dhwanil Desai) #176


Excellent compilation of data. Thanks for digging out. I was struggling to make out the stickiness of the content across various channels and how shemaroo ranks there. Though I have yet to get full idea about the methodology used to calculate it, based on the data and my limited understanding following fall outs/observations

  • From interaction with industry folks and Shemaroo management, I understand that more time the viewers spend on the channel–higher is the attractiveness for the advertisers and hence potentially higher CPM. Considering the fact that Shemaroo’s group channels have avg time spent on view is much higher- they should command higher volume/rate from advertisers.
  • However, contrary to this expectation, when I watch similar length Video across various channels (i.e film songs on Filmi Ganne Vs. film song on Ultra or a movie on Shemaroo vs a movie on Ultra), the fill rate for advertisement is much higher on Ultra than Shemaroo. This to me seems perplexing but may be there are multiple factors that may decide the attractiveness of a channel/video for advertisers which I am not able to grasp.

So not so sure, how do we evaluate the impact of this data point for Shemaroo’s business.

(Stock Duniya) #177

Just like Just Dial, unless someone acquires it, it may not have much future after Amazon and Netflix entry. It is very difficult for it to acquire new content.

(distilled_feni) #178

came across an interesting video of a vlogger going through his youtube dashboard so thought of sharing -

(dwarakanath) #179

Isnt it the other way around…,Netflix and Amazon cannot have a compelling library without paying royalties for some of the content which resides with shemaroo(both temporary and permanent rights).
Shemaroo comes higher up in the supply chain, they are not consumer facing for the most part(apart from youtube) They give their content to be used in dish tv and tata sky(miniplex) telecom operators and to online players like hotstar, amazon and netflix.
But going forward maybe the entry of Amazon and to a lesser extent Netflix may drive up the digital rights prices of content making it difficult for shemaroo to maintain the margins they do have now.

(Prasanna Sankaranarayanan) #180

The new shareholding pattern is out. Mr. Madhav Bhatkuly from New Horizon Opportunities Master Fund, has acquired close to 10% of the company for 100+ Cr this quarter. It looks like most of it was bought from Copthall Mauritius Investment Limited, which held close to 9% stake, the earlier quarter.

Is he on this forum by any chance? :slight_smile:

(Praveen K) #181

Article on competitors

Disc: Invested

(Aman Vij) #182

For those who cant access the above posted Business Standard Article due to paywall here is the article link from presssreader

2 interesting articles on how Nostalgia (mentioned by @bheeshma few posts back) being used by various brands

Those good old days and the power of nostalgia

It is undeniable that 2016 celebrated nostalgia in all its fervour and for good reason. We may not yet have the ability to physically travel through time, but mental time travel to the good old days is a rather cheap and effective way to feel better when we are unsure, uncertain, and uncomfortable. Last year certainly was not short of opportunities to make one feel that way.


From Paper Boat to Google, how brands bank on nostalgia

Memories are triggered by sights, sounds and images (and in some cases touch and smell). They invoke both anticipation and remembrance. Advertising combines all of these facets in a time capsule called nostalgia which creative experts describe as both “comfort food” and “emotional blackmail” to communicate a brand’s directive.


Disclaimer - No Investments in Shemaroo

(rvetri) #183

Another tie up with Vd2H for Shemaroo…Another revenue source
Disc: Invested

(Bheeshma Sanghani, PhD) #184


the 09 to 16 numbers ( consolidated) are mixed at best ( or i must be missing something important in my calculations )

The NOPAT margins have certainly increased over time from 9% in '11 to 14% in '16 but capital turnover has decreased over the same period from 0.74 to 0.62 (Maybe it has something to do with the way i calculate capital invested , total assets - cash & investments). Doesn’t this mean that every addn rupee of capital invested in the company is generating a revenue of just 62 paise ( as of now )?

I am aware that these are historic numbers and the growth rates in new media is what is going to contribute to the future ( hopefully ) expansion in margins. The thing is expanding margins bring in new players with bigger and better resources. There are just too many moving parts here!

(divyansh ) #185

found this on the net. brokerage house is finding shemaroo interesting if not attractive as of yet.
need to find out about their launch of “yedaz”

(Ashusharma) #187

Please compare it with peers comparable to Shemaroo and then post results. Thank you

(divyansh ) #188

idea and vodafone in talks to merge and create indias biggest teleco. also jio has propelled all players to give freebies for long term eg airtel now offering 1 year 4g at throwaway prices. these move will further make the market competitive with the end gainer being the customer in terms of better services , quality and price offerings. Also all the commercials on tv these days are mostly of smartphones or 4g services. there is a dynamic change happening around us and in a very fast way. and while coming to stock markets i only find shemaroo among the few quality names which can be be a good proxy to gain from this change. either that will show in growth or a possible takeover. either ways might be rewarding

disc: planning to buy on dips and invs at arnd 330

(dwarakanath) #189

Yes , shemaroo has invested heavily in gaining inventory in anticipation of the digital move , but i think it is happening faster than even they anticipated due to jio induced price war which is taking place now. I think they understand the landscape well and when the inflection point occurs when a significant chunk of the income start flowing digital sources the content should start paying for itself and should set up a cascade effect of further content aquisition and so on. I think their moat so to speak is
1.Content bank(which they can loan out to the netflixs and hotstars of the world)
2.Youtube channel(great subscriber count and hence a ready made audience)
3.their domain knowledge which allows them to find sources to milk their assets such as:
3.1 dish,tata sky and other packaged offerings
3.2 splicing content from movies into clips and other compilations to drive viewership

Possible avenues of revenue in the future:Their film themed merchandise called yedaz which they are experimenting with now looks very interesting.
Film Merchandise is a huge industry overseas and my sense is that india should soon jump on that bandwagon. Their huge range of content rights the hold should hold them in good stead here.

the accounting of inventory is not very simple and free cash flows are a problem right now.

disc:invested from lower levels

(divyansh ) #190