TIPS Music Q4 results are out. YoY there is improvement, but QoQ bad. Seems they still achieved almost 30% topline and bottomline growth for FY’25 as mentioned in previous concall.
But question here is I see a significant increase in Working Capital Days compared to Mar 2024(-44 to 178). Also there is high increase in “Other Financial Assets”. Any justification for it or really a concern?
Also I observe a high volume sell today(23rd April).
Mr.Taurani says ..our total industry is around INR3,500 crores, INR4,000 crores in that range.
Few excerpts from concall transcript..
And we have a potential to grow around INR10,000 crores in the next 4 to 5 years. Sony Music Publishing is the number one publishing house in the world with more than 31% market share control. So, they are integrated with most of the societies and collection agents. So, with us adding the YouTube into their kitty, we feel that our publishing revenues will drastically increase because we were not able to reach to a certain society, they will reach out.
Also, Sony Music Publishing has a better, , rates or negotiated rates with the global societies than what we could do ourselves. So I feel overall, we’ll have a good increase in the publishing revenues. success ratio is only 10%, 15%. So, we are INR1,000 crores industry, maybe success ratio is around INR150 crores, INR200 crores. So, we want to just focus on that amount as we want to have a maximum good titles from that category.
If we succeeded for 60%, 70% in acquiring those content, it will be enough for us. So if we be greedy and we go more than 30% or 25%, 28%, than there will be higher chance of getting a bad products and higher chance of doing many flops. So we are very, very cautious and very careful. And we feel the number is absolutely correct. INR100 crores is a big money. We can get a really good contentIndia is a great market to be in for music Worldwide total streaming volume reached approximately 7.1 trillion in 2023.
During that time, the USA alone accounted for 1.45 trillion streams. In 2022, India recorded 0.6 trillion streams, and in 2023, India’s contribution to the global total music streaming volume was 1 trillion.
Tips has been a consistently great company, they have after a lot of time dropped quarterly growth to 20% from 30%. Even then they grew 30% YoY. Stock market returns haven’t been linear ofcourse. I remain invested and have been adding around the cmp levels. The business is one of the best - easy to understand for someone amateur like me, great fundamentals, consistent high growth, positive outlook and good terminal value.
After reading latest concall script and also according to previous quarter, I feel concern about revised growth guidance. New content addition is lowered. Due to paywall structure, there is impact in almost everywhere in You tube, Spotify. To get momentum back, Tips will need new platforms & new strategies otherwise there will be constant 20% growth which is not bad at all. Didn’t like management reducing stake by almost 10% in last 3 years although its transferred to institutions. Management is not that much hungry as in previous years.
Good business, good fundamentals but only growth expectations have concern.
Disclosure Invested but looking for better growth opportunities.