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    Saregama India Limited

    SAREGAMA
    Media, Entertainment & Publication·1 Aug 2025
    Management Summary

    Saregama India reported Q1 FY26 operating revenue of ₹206 crores and PBT of ₹51 crores. The music segment showed a 12% YoY growth, supported by the acquisition of NAV Records. The quarter was impacted by movie postponements and advertising pressure, particularly affecting the video segment, which the company expects to turn profitable by year-end. Saregama reiterated its medium-term EBITDA guidance of 32-33% and a 5-year payback period for content investments.

    Highlights

    5

    • Operating revenue of ₹206 crores was reported for Q1 FY26.

    • PBT for the quarter was ₹51 crores.

    • The music segment, comprising licensing and artiste management, grew by 12% on a year-on-year basis.

    • Saregama acquired NAV Records, a Haryanvi music catalog with 6,500 tracks and popular YouTube channels (NAV Haryanvi, Nupur Audio) with 24 million subscribers.

    • The company maintained its adjusted EBITDA guidance of 32% to 33% for the medium term.

    Concerns

    3

    • Q1 FY26 performance was affected by multiple factors, including the postponement of several planned movie releases.

    • The video segment experienced a softer quarter with a small loss on one Malayalam release and pressure on advertising due to the Indo-Pakistan war.

    • Working capital increased by ₹210 crores during the quarter, driven by higher inventory and receivables, and lower payables.

    What Changed2

    vs Q3 FY26

    Guidance items11 → 8 (-3)Risks discussed3 → 5 (+2)

    Key financials

    Single quarter

    02 metrics
    1. 01Operating Revenue₹206 Cr
    2. 02PBT₹51 Cr

    Segment breakdown

    Music (Licensing & Artiste Management)
    12% YoY Growth
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹350 crores

    M&A

    NAV Records

    acquisition · announced

    Liquidity

    Liquidity disclosed

    Acquisition of NAV Records funded entirely through QIP money.

    Guidance & targets

    8
    CategoryTargetPriority
    Profitability
    Adjusted EBITDA Margin
    32% to 33%
    		High
    Profitability
    Video Vertical Profitability
    Profitable
    		Medium
    Profitability
    Pocket Aces Profitability
    Profitable
    		High
    Growth
    Music Vertical Annual Growth
    22% to 23%
    		High
    Growth
    Video Business Growth
    25%
    		High
    Content Spend
    New Content Spend
    ₹350 crores to ₹380 crores
    		High
    Content Strategy
    Content Acquisition Market Share
    25% to 30%
    		High
    Capital Allocation
    Capital Employed in Video & Live Segment
    not exceed 18%
    		High

    NAV Records revenue flow

    Q3 FY26 onwards
    CurrentAcquired, operationalization in process
    TargetRevenues flowing through books

    Why it matters

    To assess the financial contribution and integration success of the recent acquisition.

    We are still in the process to operationalize it, and I expect the revenues will start flowing through our book from quarter 3 onwards.

    How to verify

    key_financials.segment_breakdown

    Risks & concerns

    5
    RiskSeverity

    Postponement of movie releases

    Several planned movie releases for Q1 FY26 were postponed, impacting quarterly performance. — Management acknowledged

    medium

    Advertising pressure due to geopolitical events

    Q1 saw pressure on YouTube advertising due to the Indo-Pakistan war, which normalized by early June. — Management acknowledged

    medium

    Fixed-fee model for short-format apps

    Short-format apps currently operate on a fixed-fee model, limiting advertising revenue share, but a shift is expected in the medium term. — Management acknowledged

    medium

    Rising content acquisition costs

    Content costs fluctuate across languages, but Saregama maintains a 5-year payback period discipline to avoid overpaying. — Management acknowledged

    medium

    Impact of declining ad rates on payback period

    Analyst questioned if declining ad rates would delay payback, but management stated their yield per view has not decreased on ad-dependent platforms. — Analyst acknowledged

    low

    Q&A highlights

    8

    “What happened in the month of May happened not just on YouTube but across every media. When the country is in that situation, you typically have advertising that stops on a temporary basis. I think it's very much expected and these things don't happen regularly.”

    Addresses macro headwinds affecting ad revenue on YouTube and other platforms, clarifying it as a temporary, expected phenomenon.

    asked by Harssh K Shah

    2 min read7 chapters

    Detailed Narrative

    01

    Q1 FY26 Performance Overview

    Saregama India reported an operating revenue of ₹206 crores and a Profit Before Tax (PBT) of ₹51 crores for Q1 FY26. The quarter's performance was influenced by several factors, including the postponement of planned movie releases. Management emphasized evaluating performance on a rolling 12-month basis rather than quarter-by-quarter due to these fluctuations.

    02

    Music Segment Growth and Content Strategy

    The music segment, encompassing licensing and artiste management, demonstrated a 12% year-on-year growth. The company remains confident in achieving its medium-term annual growth target of 22% to 23% for this vertical. Saregama released over 1,000 original and premium recreations across various Indian languages, focusing on exclusive artists and non-film content.

    03

    Strategic Acquisition of NAV Records

    A significant highlight was the acquisition of NAV Records, a Haryanvi music catalog comprising 6,500 tracks, including popular YouTube channels with a combined 24 million subscribers. This acquisition, funded by QIP money, strategically fills a gap in Saregama's regional music strength. Revenues from this deal are anticipated to start flowing into the company's books from Q3 FY26 onwards.

    04

    Video Segment and Pocket Aces Outlook

    The video vertical experienced a softer Q1 due to a small loss on a Malayalam film release and advertising pressure from geopolitical events. However, management expects the video segment to achieve profitability on a full-year basis, maintaining a cautious approach with capital employed not exceeding 18% of total capital. Pocket Aces, a key part of the video segment, is also projected to turn profitable by the end of the current financial year.

    05

    Carvaan and Live Events

    Saregama has fully rolled out a new retail strategy for Carvaan, focusing on e-commerce and modern trade, leading to improved profitability margins. The company anticipates achieving mid-single-digit margins for Carvaan by the end of the year. In live events, the Cap Mania tour with Himesh Reshammiya launched successfully, with plans for expansion to multiple cities, and stand-up comedy shows with Viraj Ghelani also continued to perform well.

    06

    Capital Allocation and Content Investment

    The company plans to spend between ₹350 crores to ₹380 crores on new content for FY26, with most major releases scheduled for Q3 and Q4. Saregama adheres to a 5-year payback period for all content acquisitions and aims to acquire 25% to 30% of all new content coming out, supported by a ₹700 crore investment. Management emphasized a data-driven approach to content selection to maintain a high hit ratio.

    07

    Industry Trends and Monetization

    Saregama noted a trend of streaming platforms (YouTube, Spotify, Saavn) pushing for paid subscriptions, which is expected to improve revenue yield. While short-format apps currently offer fixed fees, the company foresees a shift to ad revenue sharing in the medium term. The company is also developing a new vertical to sell bespoke content and sponsorships to brands, combining music, video, and influencer offerings.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.