Release Date: August 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Saregama India Ltd (BOM:532163) reported a 12% year-on-year growth in its music segment, with expectations of achieving 22-23% annual growth in the medium term.
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The company successfully released over 1,000 original and premium recreations across multiple languages, strengthening its music catalog.
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Saregama acquired the popular Haryanvi music catalog under Nav Records, enhancing its regional music offerings and YouTube presence.
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The company is focusing on artist management, adding 25 new influencers and artists, bringing the total to over 230, with a combined follower base of 200 million on Instagram and YouTube.
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Saregama is maintaining a strong financial position with a 32-33% EBITDA guidance and plans to invest aggressively in new music content to ensure long-term growth.
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The quarter faced challenges due to the postponement of several major movie releases, impacting revenue.
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There was pressure on YouTube advertising revenue due to temporary stoppages during geopolitical tensions, affecting monetization.
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The video segment incurred a small loss due to limited releases, and the company remains cautious with its investments in this area.
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Working capital increased significantly, with inventory and receivables rising, which the company attributes to temporary factors.
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The transition from free to paid subscriptions in the music streaming industry is slower than anticipated, affecting revenue growth.
Q: What challenges is the music industry facing, particularly with YouTube and advertising? A: Vikram Mehra, Managing Director, explained that there are no significant headwinds on YouTube. The temporary advertising stoppage in May was due to the country’s situation, affecting all media. Typically, Q1 is weaker for YouTube as advertising shifts to television during IPL. However, numbers normalized by June, and the views data indicates a healthy state.
Q: Can you elaborate on the video segment’s profitability and future outlook? A: Vikram Mehra stated that the video business should be viewed annually rather than quarterly due to release timing. The company follows a cautious investment approach, limiting capital employed in video and live segments to 18%. More titles are expected later in the year, and profitability is anticipated by year-end.
Q: Why has the capital employed in the media vertical increased by 25% year-on-year? A: Vikram Mehra clarified that this is a temporary phenomenon, with numbers expected to normalize by Q2 or Q3. The increase is due to investments in exciting projects, and historically, capital employed has shown fluctuations.