Saregama PAT was Rs. 41 cr. in Q1 FY23.
PAT increased by 52% year on year to Rs. 41 Cr. in Q1 FY23. The company’s operating revenue rose 61% YoY to Rs. 169 Cr. in Q1 FY23. Saregama’s operating income before content charge, interest and depreciation (OIBCID) rose 54% to Rs. 64 r. in Q1 FY23 from Rs. 42 Cr. in the corresponding quarter last year. The Q1 FY23 PBT stood at Rs. 55 Cr. as against Rs. 36 Cr. in the corresponding quarter last year, with a 52% growth YoY.
Current and future quarter work:
During this quarter, the company launched the music of Mahesh Babu’s Sarkaru Vaari Paata in Telugu; Operation Romeo and Ittu Si Baat in Hindi with music from singers like Arijit Sigh and Jubin Nautiyal. Saregama also released multiple “Originals” songs sung by Neeti Mohan, Stebin Ben, etc. Overall, the company released 186 films and non-film songs across Hindi, Bhojpuri, Gujarati, Punjabi, Tamil, Telugu, Malayalam, Marathi, and Bengali languages. The other highlight of the quarter was the use of songs by brands like Dabur, Vogue Eyewear, TVF, One Card, PhonePe, etc. in their ad films.
With retail markets opening up, Carvaan continued to regain its momentum. The company sold 98k units in Q1, compared to 45k last year. During the last fortnight of June, they also started test marketing two new variants, namely, Music Bar with Karaoke and Carvaan Mobile.
They have completed shooting of our first Malayalam film, “Padavettu,” starring Nivin Pauly. The shooting begins for the next Malayalam film “Kaapa” starring the superstar Prithviraj Sukumaran and the shooting of the first Punjabi film “Oye Makhana” starring Amy Virk. “Hunter-The Invisible Women”, starring Suniel Shetty, is expected to be released soon. Roja and Anbe Vaa are the slot leaders in their respective prime time slots. The Saregama TV Shows YouTube channel garnered 38 million views in Q1FY23. Star India has licensed the remake rights of the TV series “Roja” for the Hindi language. The company continues to create short video content relating to “Bhakti” and “Yoga” exclusively for YouTube. In addition to concerts, the vertical will develop musical theatre IP based on the stories and songs of some of the greatest films in our catalogue, like Disco Dancer and Karz.
Valuations:
The company has reported an EPS of Rs. 2.15 for the period ended June 30, 2022 as compared to Rs. 1.56 for the period ended June 30, 2021. The ROCE and ROE stood at 22.1% and 16.2%, respectively. The stock is trading at a P/E of 46.4x, which is not expensive, and a 5-year P/E of 24.7x. Saregama has an EBITDA multiple of 30.4x and an interest coverage ratio of 43.6x. The price to book ratio is at 5.61x, which has a book value of Rs.71.4. The scrip was trading at Rs. 401, down by 1.43% on Monday.
