Q1FY26
Sales flat, profit flat 
Heard earning call. Vikram Mehra was more interested in tellling investors how to think long term rather than explaining why most of the numbers were flat.
12 month rolling basis view and timing of last year Q1 being good and this year Q1 not being good was the reason for flat performance.
Also four major free streaming platforms in India including Wynk (Airtel) shutdown was the reason.
i think in heydays of music streaming and video streaming, numbers coming flat is big issue which management was covering by exuding confidence in the earnings call.
Revenue for whole year is projected to grow at 22-25%
Other points mentioned
- Music Vertical (Licensing and Artist Management): This grew 12% year-over-year, but Mehra noted it was impacted by:
- Postponement of major movie releases, which delayed associated music albums. He contrasted this with the prior year’s Q1, which had hits like Tauba Tauba, Chamkila, and Kalki. Upcoming releases Love and War, Dhurandhar and are slated for Q3/Q4, suggesting a back-loaded year.
- Lingering effects from Airtel Wynk’s shutdown (November 2023), which shifted users from free to paid models. This “cycle” is expected to normalize by mid-Q3.
- Temporary YouTube ad revenue dips due to reduced spending during the India-Pakistan tensions in May, though it normalized by June. He emphasized that Q1 is typically weaker for YouTube ads due to IPL competition on TV.Despite this, guidance remains optimistic: 22-23% annual growth in music on a medium-term basis, with new content spend of ₹350-380 crore and a 5-year payback period for investments.
- Video Vertical: This was described as a “softer quarter” with a small loss from one Malayalam film release and a digital series. Mehra explained the cautious approach—capping capital employed at 18% of total—to avoid big swings. He projected full-year profitability, driven by upcoming titles, but acknowledged it’s still an experimental area with limited management bandwidth.
- Live Events and Retail (Carvaan): The new Capmania tour with Himesh Reshammiya started with initial losses due to high upfront marketing, but is expected to turn profitable as it expands. Carvaan retail strategy was streamlined (team cut from 150 to ~20), leading to lower volumes but improving margins toward mid-single digits by year-end.
- Overall Company Guidance: Adjusted EBITDA is maintained at 32-33%, with confidence in steady medium- to long-term growth fueled by India’s digital consumption boom (400 million internet users) and Saregama’s cash reserves.
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My view is that fad has subsumed. This may be good for long term investors.
The Business would grow at a steady pace, after shaking off the hype. The company would enhance the catalogue with acquisitions, partnerships.
The valuation may also come to a reasonable level for long term investor to enter and hold
Just my view
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The stock just hit a 52 week low today of Rs 409
Is this just because of quarterly results or are there any structural issues?
Interested.
Excellent macro analysis of the state of music and entertainment industry. Some repetitive stuff from Vikram but great job by the interviewer to get fresh insights. Two key takeaways-
- music labels are no longer distribution platforms, rather the focus is on packaging the content and making it more discoverable. Given there is no lack of content.
- generative AI is a risk, like how piracy was at one point, however everyone is trying to figure out how it can be used for newer content without copyright infringement. End of the day, AI needs to be trained with existing content.
Kudos to the interviewer.
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Do we have any credible data on how much a music label like Saregama typically pays to acquire music rights for a single film? Specifically, are there any disclosures, benchmarks, or reliable estimates for what Saregama may have paid for the music rights of Dhurandar?
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Would Reliance report this? Cos Dhurandhar is produced by JIo studios
In some previous Concalls they have clearly said that they will not disclose such expenses specifically since that information is sensitive and can be used by their competitors to Saregamas disadvantage.
But a financial model I built showed average acquisition cost per song to be around 1.35L.
[Simple CAPEX/Approx number of songs acquired during a period]
I am assuming that songs from popular actors/singers/movies will be well above this average. This is because I am assuming that local/regional music would be much cheaper and below the average.
Give a 40-50% premium per song maybe and multiply the number of songs in whichever movie you are concerned of. You might have an approx number.
Disc: Invested, Biased
Produced by Jio Studios
Music rights are owned by Saregama India.
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vikram mehta the MD of Saregama ltd is also the chairman of IMI (Indian Music Industy) in last’ years Annual Meeting of the IMI he mentioned that an A grade movie (with star bollywood actor) music album costs around 25-30 crores (5-6 songs per album) he also mentioned that a single song video by an average singer costs around 10-15lacs, so i guess regional should be around 2-5 lacs per song.