Saregama India Limited — Q3 FY26 earnings call

Call held 3 Feb 2026

Management summary

Saregama India reported Q3 FY26 operating revenue of INR 260 crores and operating PBT of INR 76.5 crores, with strong 29% YoY growth in the music segment. The company closed a strategic minority investment in Bhansali Productions for exclusive music access and expects its Pocket Aces venture to break even this year. Despite a one-time exceptional charge, management reiterated its medium-to-long-term adjusted EBITDA guidance of 32-33%.

Highlights

  • Operating revenue reached INR 260 crores in Q3 FY26.

  • Music segment revenue grew by 29% year-on-year in Q3 FY26, and 18% for the nine months.

  • Operating PBT stood at INR 76.5 crores, with reported profit of INR 69.5 crores after an exceptional item.

  • Strategic minority investment in Bhansali Productions provides exclusive access to marquee Hindi film music at pre-agreed costs.

  • Pocket Aces, including artist management and video content, is expected to be breakeven this year and grow at a 25% CAGR.

Concerns

  • A one-time non-cash exceptional item of INR 7 crores impacted reported profit due to new Labour Code.

  • Several planned film releases for FY26, including 'Love & War' and 'Paradise', were pushed to the next financial year.

  • Unallocable expenditure increased due to a decrease in other income from surplus funds invested in FDs and mutual funds.

Key financials

2 periods

Headline

  • Operating Revenue
    ₹260 Cr
  • Operating PBT
    ₹76.5 Cr
  • Exceptional Item
    ₹7 Cr
  • Reported Profit
    ₹69.5 Cr

Q3

  • Adjusted EBITDA
    46%

What they filed

Q1 FY27: revenue up 17.5%, net profit up 32.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue213 407 216 177 195 −8%210 −48%238 +10%208 +18%
EBITDA64 82 73 57 71 +11%91 +11%122 +67%91 +60%
Net profit49 61 56 40 48 −2%53 −13%74 +32%53 +33%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Music
    29% Revenue Growth (Q3 YoY)18% Revenue Growth (9 Months YoY)
  • Events
    ₹5.7 Cr Profit (Q3)

Capital allocation

high confidence
  • Capex ₹275 Cr
    • New music content acquisition In progress ETA ongoing

    Timeline: Content investment of INR 1,000 crores over FY25, FY26, and FY27.

    Overall, our spend for the new content this year will be in the space at INR 275 crores to INR 300 crores.
  • M&A Bhansali Productions Acquisition · Closed

    Provides exclusive access to marquee Hindi film music at a pre-agreed cost structure, helping cost structures and guaranteeing access to music from a big film production house.

    Valuation linked to the financial performance of Bhansali Productions over the next 3 years.

    During the quarter, the company made a strategic investment in Bhansali Productions through a significant minority ownership, with valuation that is linked to the financial performance of Bhansali Productions over the next 3 years. ... This transaction finally got closed on 30 January, '26, wherein we have paid the money that we were committed to.
  • Liquidity Liquidity disclosed INR 15 crores in assets locked in the events vertical.
    Even now if you see at the end of this quarter, we have, what, close to INR 15 crores, assets which is locked into the events vertical.

Guidance & targets

Profitability

  • Adjusted EBITDA Profitability · medium-to-long-term · High confidence 32-33%
    we will continue with our guidance of 32%, 33% adjusted EBITDA for the mid- to long-term basis for the company.

    — Vikram Mehra, Managing Director

  • Pocket Aces Profit Profitability · FY26 · High confidence Breakeven

    From Loss today

    And last year, we people had still written a loss. This year is a breakeven year for us.

    — Vikram Mehra, Managing Director

  • Events Business Margin Profitability · 2-3 years · Medium confidence high single-digit percentage
    On the profitability side, we are very, very clear in our edge that in a steady state, we want it to be a high single-digit margin percentage. ... But it will take 2 to 3 years to go out there and on a steady basis, achieve these percentages.

    — Vikram Mehra, Managing Director

Revenue

  • Music Segment Growth Revenue · medium-to-long-term · High confidence 21-23%
    We continue with our guidance of 21% to 23% growth in the medium to long term in music segment

    — Vikram Mehra, Managing Director

  • Music Segment Growth Revenue · FY26 · High confidence 17-18%
    This year, the number may be closer to 18%, 19%, but next year onwards, we should be back to 21% to 23%.

    — Vikram Mehra, Managing Director

Capex

  • Content Investment Capex · FY26 · High confidence INR 275-300 crores
    Overall, our spend for the new content this year will be in the space at INR 275 crores to INR 300 crores.

    — Vikram Mehra, Managing Director

  • Content Investment Capex · FY25-FY27 · High confidence INR 1,000 crores
    our music investment on newer content, we have given a guidance of around INR 1,000 crores over financial year '25, '26 and '27.

    — Vikram Mehra, Managing Director

Growth

  • Pocket Aces (Artist Management + Video Content) CAGR Growth · High confidence 25%
    I am expecting right now that the Pocket Aces part of the business, which is a combination of artist management and some amount of video content should be growing at a 25% CAGR.

    — Vikram Mehra, Managing Director

Efficiency

  • New Music Content Payback Period Efficiency · High confidence 5 years
    Overall, we continue with the guidance of a 5-year payback period for all new music content that we're acquiring.

    — Vikram Mehra, Managing Director

What to watch in Q4 FY26

Music Revenue Growth (FY26)

next quarter
Current 18% (9 months YoY)
Target 17-18% (full FY26)

Why it matters

This is the core business growth target for the full financial year, indicating the company's overall performance trajectory.

We are confident that we will be able to meet our guidance for the full financial year of 17% to 18% growth in music business.

Risks & concerns

  • Lumpy and unpredictable nature of live events business

    medium

    Live events business is subject to periodic ups and downs, impacting both top and bottom line, depending on tour schedules.

    Management acknowledged

  • Volatility of film production business (Bhansali Productions)

    medium

    Analyst raised concerns about the inherent volatility of film projects (blockbuster or otherwise) impacting the investment, but management highlighted financial oversight and Bhansali's track record.

    Analyst downplayed

  • Competition for managed artists and potential poaching

    low

    Management avoids disclosing the full list of managed artists to prevent competitors from poaching them.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Presentation of 12-month rolling financials excluding events Direct
From next quarter onwards, our presentation will now be showing the growth numbers on a rolling 12-month basis also.

Analyst requested more transparent reporting for better evaluation, and management committed to it.

Asked by Sujit Jain

Evaluation parameters for Pocket Aces and Bhansali Productions investments Direct
Pocket Aces on its own makes a lot of sense, but it makes even more sense from the music perspective. Today, if Saregama has got the biggest hit rate in the market in terms of music album, it's not just happening because we are smarter one, maybe a little bit contribution to that. But the fact of life is we are the most effective marketing machinery in there on the digital side.

Analyst sought clarity on how to track the success of these strategic investments beyond just top-line numbers, and management explained the synergistic benefits and financial targets.

Asked by Sujit Jain

Q4 FY26 outlook and impact of pushed-out movie releases Partial
We are still hopeful to go back and maintain our guidance of 17% to 18% on a full-year basis when we end Q4. That's all I've stated till now. There are releases that are planned. And as I talk right now, there are various regional language releases that are also happening.

Analyst inquired about the momentum for the next quarter given Q3 successes and deferred film releases, and management reaffirmed confidence in full-year music growth targets.

Asked by Lokesh Manik

Events segment growth and margin upliftment from video business wind-down Direct
On the profitability side, we are very, very clear in our edge that in a steady state, we want it to be a high single-digit margin percentage. ... I don't think today, it will make sense for me to give a guidance on the revenue side.

Analyst sought specific financial targets for the events business and the impact of winding down the lower-margin video business, prompting management to outline profitability goals and strategic focus.

Asked by Kavish Parekh

Discrepancy between Q3 EBITDA margin (46%) and long-term guidance (32-33%) Direct
Now, these are aberrations that keep on happening. 46% cannot be offered right now quarter-on-quarter. It just depends on which content got released or which revenue peaked, while the cost may be sitting on a quarter 2 or a quarter 4 basis. So long term, it's not that we believe EBITDA percentages are going to come down. We will change our guidance once the mix of our vertical stabilizes.

Analyst questioned the maintained guidance despite a significantly higher reported Q3 margin, leading management to clarify the Q3 figure as an aberration and reiterate the long-term consolidated view.

Asked by Kavish Parekh

Contribution of older catalogue vs. newer content to music licensing growth Direct
Though catalogue is growing for us, but the large increase that we people are seeing on the growth side is coming from the newer content investment. Industry is growing anything between 5% to 8% year-on-year basis. Remaining growth that is coming in is coming in because we are investing heavily in newer content and our market share is going up.

Analyst sought to understand the drivers of music growth, and management explained the differential growth rates between legacy content and new investments.

Asked by Hitaindra Pradhan

Details of managed artists and the split between music and non-music Evasive
We typically don't give the names that easy because the moment my competition knows everybody in detail, it becomes easy to go out there and poach. I'm happy to share the entire list. You have the big artist names that are mentioned.

Analyst probed for specific details on the artist management business, but management declined to provide granular information to protect competitive advantage.

Asked by Shivan Sarvaiya

Dhurandhar 2 music going to a competitor Partial
So, all I can say, Aditya, that instead of commenting on a specific movie, we are very, very clear, we do content investment in a fashion that we end up getting a payback period. We don't do content investment keeping vanity in play at any particular time.

Analyst questioned a potential loss of content, and management reiterated its disciplined approach to content acquisition based on payback periods rather than competitive bidding wars.

Asked by Aditya Nahar

2 min read 6 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Saregama India reported an operating revenue of INR 260 crores and an operating PBT of INR 76.5 crores for Q3 FY26. After accounting for a one-time, non-cash exceptional item of INR 7 crores related to the new Labour Code, the reported profit stood at INR 69.5 crores. The adjusted EBITDA percentage for the quarter was notably high at 46%, though management clarified this as an aberration and reiterated its medium-to-long-term consolidated guidance of 32-33%.

Music Segment Growth and Content Investment Strategy

The music segment demonstrated robust growth, increasing by 29% year-on-year in Q3 FY26, contributing to an 18% growth for the nine-month period. Management is confident in achieving a 17-18% music revenue growth for the full FY26, with a medium-to-long-term guidance of 21-23%. This growth is primarily fueled by significant investments in newer content, with the company projecting a content spend of INR 275-300 crores this year and a total of INR 1,000 crores over FY25-FY27, maintaining a 5-year payback period for new acquisitions.

Strategic Investment in Bhansali Productions

Saregama made a strategic minority investment in Bhansali Productions, with the transaction closing on January 30, 2026. This deal provides Saregama with exclusive access to marquee Hindi film music at pre-agreed cost structures, ensuring a guaranteed flow of content without competitive bidding. The valuation of this ownership is linked to Bhansali Productions' financial performance over the next three years, aligning incentives for prudent film production.

Pocket Aces and Artist Management Business

The Pocket Aces acquisition is showing positive momentum, with management expecting it to reach breakeven this year, compared to a loss in the previous year. The combined artist management and video content business under Pocket Aces is projected to achieve a 25% CAGR in the medium-to-long term. Saregama added 60 new artists this quarter, bringing the total to over 270, leveraging its 300 million digital footprint across platforms like Instagram and YouTube to promote these artists and their content.

Events Business and Video Content Evolution

The events business contributed INR 5.7 crores in profit during Q3 FY26, driven by successful shows with artists like Diljit Dosanjh and Himesh Reshammiya. While acknowledging the 'lumpy' nature of this segment, Saregama aims for a high single-digit margin percentage within 2-3 years. The company is also winding down its in-house movie business over the next 12-15 months, shifting focus to short-to-medium length video content, including the use of GenAI tools to generate music videos for older catalogue songs, reducing production time significantly.

Digital Monetization and Subscription Push

YouTube revenue continued to grow as expected, and Saregama observes a gradual transition from free to paid subscriptions on audio streaming platforms. Management believes India holds significant potential for 100 million paid subscribers at INR 90-100 per month, supported by increasing digital consumption, robust digital infrastructure, and ease of online payments. This shift is expected to provide a booster to future revenue growth beyond current projections.

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