SAREGAMANSEQ4FY25May 16, 2025

Saregama India Limited

11,597words

102turns

11analyst exchanges

4executives

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Management on call

Pankaj Chaturvedi

CHIEF FINANCIAL OFFICER

Anand Kumar

GROUP HEAD – INVESTOR RELATIONS

Pankaj Kedia

EXECUTIVE DIRECTOR – INVESTOR RELATIONS

Eksha Modi

- JM FINANCIAL

Key numbers — 40 extracted

INR1,171 crore

nk you, and a very good morning to everyone. Financial year '25 saw our highest annual revenue of INR1,171 crores, a 46% growth over financial year '24. Also our highest Adjusted EBITDA of INR356 crores, which

46%

good morning to everyone. Financial year '25 saw our highest annual revenue of INR1,171 crores, a 46% growth over financial year '24. Also our highest Adjusted EBITDA of INR356 crores, which is 18% g

INR356 crore

nue of INR1,171 crores, a 46% growth over financial year '24. Also our highest Adjusted EBITDA of INR356 crores, which is 18% growth over financial year '24 and PBT of INR276 crores, which is 2% higher than l

18%

a 46% growth over financial year '24. Also our highest Adjusted EBITDA of INR356 crores, which is 18% growth over financial year '24 and PBT of INR276 crores, which is 2% higher than last year. Our

INR276 crore

highest Adjusted EBITDA of INR356 crores, which is 18% growth over financial year '24 and PBT of INR276 crores, which is 2% higher than last year. Our investment on content this year was INR316 crores, which

of INR356 crores, which is 18% growth over financial year '24 and PBT of INR276 crores, which is 2% higher than last year. Our investment on content this year was INR316 crores, which was 62% highe

INR316 crore

BT of INR276 crores, which is 2% higher than last year. Our investment on content this year was INR316 crores, which was 62% higher than that of financial year '24. All of this is in sync with the strategy

62%

ich is 2% higher than last year. Our investment on content this year was INR316 crores, which was 62% higher than that of financial year '24. All of this is in sync with the strategy shared with all

rs,

'24. All of this is in sync with the strategy shared with all of you guys over the last few quarters, wherein we want to future-proof our company through aggressive new IP purchase, but at the same ti

239 million

f the year for us was that our digital footprint across YouTube, Instagram and Facebook grew from 239 million as of last year to 350 million during the year. That's a massive growth right now by any yardstic

350 million

digital footprint across YouTube, Instagram and Facebook grew from 239 million as of last year to 350 million during the year. That's a massive growth right now by any yardstick. Coming to the quarter. Thi

INR241 crore

e growth right now by any yardstick. Coming to the quarter. This quarter saw operating revenue of INR241 crores and PBT of INR81.6 crores. Let me start, as always, with the music business, which comprises of

Guidance — 20 items

Vikram Mehra

opening

“As I've been sharing with you right now for over a few quarters, the next few years will be the period during which we will invest in content in very heavy fashion to once again get ourselves back on the #1 position that we used to enjoy a few decades back.”

Vikram Mehra

opening

“The EBITDA is going to follow, but not that rapidly and PBT will be growing at a slower rate.”

Vikram Mehra

opening

“And the moment we come to the seventh or the eighth quarter, PBT will also start moving at a much faster pace for the simple reason that the content that we would have taken by that time will start having a revenue, which is higher than the charge-off that we will be accounting for.”

Vikram Mehra

opening

“With all this investment in new content, we maintain our guidance of 5-year payback period.”

Vikram Mehra

opening

“With digital advertising growing at 17% per annum, we believe that the Artists and the Influencers economy will be the biggest beneficiary.”

Vikram Mehra

opening

“And you will be seeing more and more content coming with these people.”

Vikram Mehra

opening

“And all this acquisition that we are doing will be funded through QIP and internal accruals.”

Vikram Mehra

opening

“We expect over the next 5 years, this vertical to keep on growing at a CAGR of 25%.”

Vikram Mehra

opening

“We believe music vertical comprising our licensing and artist management to grow at 22% to 23% per annum over the medium term.”

Vikram Mehra

opening

“At the overall company level, we expect PBT to double over the next 3 to 4 years.”

Risks & concerns — 15 flagged

All of this is in sync with the strategy shared with all of you guys over the last few quarters, wherein we want to future-proof our company through aggressive new IP purchase, but at the same time, we are hedging our risk by diversifying our IP portfolio across music, live events, long-format video, short-format video and management of the content creators.

— Vikram Mehra

But if we see the numbers on a full year basis, music revenues grew by close to 12%, which is lower than the previous year, but the big area of decline was primarily on account of closure of Wynk and Hungama, movement of Gaana from a free service to a fully paid service.

— Vikram Mehra

Financial year '25 were also a little difficult because most of the digital platforms that used to license our content were in a state of flux.

— Vikram Mehra

So revenue was weak this time versus very strong growth in earlier quarters.

— Abneesh Roy

Was there any one-off which led to revenue decline this time?

— Abneesh Roy

And sir, the question would then be, given that you are still maintaining your medium- term guidance on the music revenues, will this paid subscriptions revenue be able to offset any impact of these closures, which will still be there in your base, right, for FY '26, at least some part of that?

— Swapnil Potdukhe

This is an impact of the growth in the digital economy and the increase in the market share that Saregama is able to drive.

— Vikram Mehra

Is it possible to quantify if we exclude the impact of Wynk shutting down, what could have been the music revenue growth in this quarter?

— Mayur Patel

The net impact of this entire amount is about INR4.9 crores, which is shown as an exceptional item, not arising from business.

— Pankaj Chaturvedi

If I just put all this together, the total impact of these 3 items is about INR0.8 crores plus on the overall P&L.

— Pankaj Chaturvedi

On Pocket Aces following up, so FY '24 had witnessed a 12-odd percent decline in terms of revenues for Pocket Aces.

— Kavish Parekh

So given the recent decline in revenue from the event business, so can you share how Marquee shows, such as CAP-MANIA” and that Viraj are expected to revive momentum in this segment?

— Jyoti Singh

Ma'am first, did you see a decline in the Events revenue?

— Vikram Mehra

Had the impact of Gaana and Wynk not been there, we would have been back right now on the track of what we have been able to do for so many years, and we are committed to be doing starting once again right now of financial year '26.

— Vikram Mehra

Prior to Pocket Aces, we were at about INR115-odd crores in '23, INR157 crores in '24, but that had some impact of Pocket Aces.

— Lokesh Manik

Q&A — 11 exchanges

`My first question is on revenue. So revenue was weak this time versus very strong growth in earlier quarters. So if you could tell us in FY '26, how we should build in terms of our model for each of the revenue items? Was there any one-off which led to revenue decline this time?

Vikram Mehra

No. So remember, please don't compare quarter 4 with quarter 3. Quarter 3 had one-off revenue of the Diljit's tour that had got factored in. Otherwise, if you look at an overall basis, even if you look at the year-wise basis, financial year '25 is 46% growth over your financial year '24. So I don't think revenue growth has been an issue right now in this particular year. No, no, Q4 Y-o-Y, I'm saying Q4 Y-o-Y. It is down 8%. I think we have stated this to you in specific, and by and large to the entire investment community, please look at our business on a 12-month rolling basis. You cannot loo

My first question is on the one-off impact that you mentioned in your opening remarks with respect to closure of Wynk, Ghana, Resso, et cetera. Just wanted to get a sense as to when exactly should we expect these closures to come into our base? Because if I'm not wrong, Wynk closed in July, sometime Gana was a bit earlier, if I'm not wrong. So just getting a sense as to the timing as to where these one-offs will not be an impact on our revenues going ahead?

Vikram Mehra

2 parts here. One, my understanding is that Wynk closed in November, not in July. So this is the first quarter that we people had without any revenues coming from there. So let me restate our position; Sad as we are that some of these free streaming platforms are shutting down, but truly speaking, in a way, we are very relieved. Because we know free streaming is not the way this industry can get built. Globally, every market after market from the U.S. to China to any of the European countries or even some of the Latin American countries, the music industry is built on the back of paid subscrip

So just one question. Is it possible to quantify if we exclude the impact of Wynk shutting down, what could have been the music revenue growth in this quarter?

Vikram Mehra

I can't give you specific. I'm giving you what was the deal value of my Wynk. So that will be. What was it? Can you please repeat. I missed it, sorry. The revenue would have been decent right now. So let me put it this way. Again, please don't look at us ever on a quarter basis. Our industry is in a fashion in a way right now that you need to look at us on a 12-month rolling basis. Reward us, punish us, but always do it on a 12-month rolling basis because the way the practices of the industry are the money that we end up getting, they are not timed right now to a particular month for any of ou

Vikram, could you share some more details about the exceptional gain that you recorded? What changed in the outlook for Pocket Aces? And what is the new valuation?

Pankaj Chaturvedi

Kavish, I'll just take that question. So when we acquired Pocket Aces for about 51% stake, we recorded 100% liability in our books because it was a committed transaction, right? So based on the valuation and estimates, we recorded a liability. We also did a purchase price allocation and recorded a goodwill to that effect. Now when we have acquired the remaining 40% , and we also need to acquire the remaining 8%-9%, we have reassessed the liability. There is a write-back of liability on account of the lower consideration, and there is a corresponding impact on account of reduction in goodwill.

A few questions from my side. So firstly, on the EBIT margin, when I look in the music vertical which...

Vikram Mehra

Your voice is breaking. Yes. So basically, what I was asking is on the EBIT margin in the music vertical, right, which we kind of include the Carvaan part also. So what we observed that the EBIT margin are at multi-quarter high. So basically, what I wanted to understand here is, is it a function of, in addition to the reduction in losses in the Carvaan business, anything else which has kind of contributed to the higher profitability in the music vertical, meaning has there been any sort of rationalization that has happened even on the music vertical, I mean, excluding the retail part? No. So b

Yes. So what I'm asking is that the improvement in margin that we are seeing here, so basically, it is more to do with scale, right?

Vikram Mehra

So listen, when you are talking about improvement in margin, please look at everything on a financial year basis or 12-month basis. Please don't read anything on a quarter basis. Our margins don't change quarter-on-quarter at all. The same thing which I've repeated, I think, 3, 4 times earlier, I'll again reiterate. Please read us on 12-month rolling basis, evaluate our performance only on a 12-month rolling basis. I'll be honest out here. I don't think the benefits of scale have started accruing to us yet. I don't even see at this moment our music licensing margins going up that dramatically,

Sir, as you mentioned on the revenue side. So given the recent decline in revenue from the event business, so can you share how Marquee shows, such as CAP-MANIA” and that Viraj are expected to revive momentum in this segment? And are there any measurable KPIs or target you are aiming for? And second question on the regional language side, like we have a lot of focus on the Bhojpuri and other Gujarati language, but they still contribute only a small portion to the overall revenue mix. So can you provide insight on it?

Vikram Mehra

Ma'am first, did you see a decline in the Events revenue? Sir, like compared to earlier quarter as now, sir? I'm repeating for your sake, sixth time in this call, please evaluate us on a 12-month rolling basis. You cannot do the business like events cannot be seen on a quarterly basis. Most of the events in this country happen in the Diwali time frame, right? Other times right now, number events start coming down. Please, please I'm requesting you. Everything you read us on it. Your question is valid, how will we maintain the growth momentum? I'll answer that. But please don't look at these th

The first question was on the music vertical. We had a content charge of about INR85 crores last year FY '24. I believe we ought to have seen the music revenue increase by that much at the minimum. And given that your past commentary that the listener is platform agnostic that is if one platform shuts down, he may choose to go to another platform and listen to the music. Given these 2 scenarios, is being shutting down the only reason that we are seeing a flattish growth on the music side?

Vikram Mehra

That's your primary reason. You're right, customers do switch, but there's always that much amount of a lag between a service shutting down and the customer from that service moving across to the second service. Also, there's a role of minimum guarantees that starts happening out here. So the net impact is there. But has the industry been able to absorb the closure of a service like a Resso? Yes, we all have been able to, but Resso has been shut down for over about 15, 16 months, and that does not even factor in anywhere in the overall revenues for the industry. The answer to the next part is

Perfect. So I may be asking as a repeat, I joined a little late. But I just wanted to check that last year, the largest paying platform took a material price cut on a per stream basis, right, went from INR0.10 to INR0.05. So now do you expect that to further go down? What are the negotiations right this year? And should we assume that the new pricing is the base that will not further collapse the growth from here will be...

Vikram Mehra

So one, I can't talk about individual deals between us and any individual player. In general, our guidance is clear out here; we are holding on to our medium-term guidance of our music business growing at 22% to 23%. So there is no question of collapsing happening at all. Second, the dependence of the Saregama in specific and music -- in Indian music industry in general on free is coming down. We believe right now, it's a matter of another 4 to 5 quarters that you will see all of us growing in tandem right now on the back of growth on the subscription side. The good news on the subscription si

Firstly, our music licensing business ex of artist management and the Carvaan business has grown just 3%, 4% for the full year FY '25, while the comparable peer has reported 27%, 28% growth in the similar line of business. So can you help me understand the variance here?

Vikram Mehra

See, there is no business. You are cutting a line right now where the line doesn't exist. The way our Music business is being built right now, primarily the entire non-film music business of ours is being built on the back of artist management. In our system right now, when we look at the profitability analysis, it's not done that songs have made collection and how much artist have earned. Both these things go hand in hand. We are taking bets on artists who are signed on to us, putting money on those people and trying to make money from the same artists, not just the songs that the artist will

Thank you. Thanks a lot. I'm very happy right now with the quality of questions and the level of interest I have seen. We, as a company, when we look at our India, we look at 750 million to 800 million people with a smartphone in their hands. If we start counting some of the other parts of the world where, music that is coming from India or the video content coming from India is consumed, we are looking at a huge number of close to 1.8 billion to 2 billion people who consume our content. This makes us very excited about how rosy the future is going to be. We want to be the primary content comp

Management

Speaking time

Vikram Mehra

Moderator

Swapnil Potdukhe

Harssh Shah

Lokesh Manik

Abneesh Roy

Mayur Patel

Aman Singh

Jyoti Singh

Akshay Jogani

Opening remarks

Eksha Modi

Thank you, Pooja. Good morning, everyone, and welcome to Q4 FY '25 Earnings Conference Call of Saregama India Limited. First of all, I would like to thank the management of Saregama India Limited for giving us the opportunity to host this call. From the management team, we have Mr. Vikram Mehra, Managing Director; Mr. Pankaj Chaturvedi, Chief Financial Officer; Mr. Anand Kumar, Group Head, Investor Relations; and Mr. Pankaj Kedia, Executive Director, Investor Relations. I would now like to hand over the call to Mr. Vikram Mehra for his opening remarks, post which we can open the floor for Q&A. Thank you, and over to you, sir.

Vikram Mehra

Thank you, and a very good morning to everyone. Financial year '25 saw our highest annual revenue of INR1,171 crores, a 46% growth over financial year '24. Also our highest Adjusted EBITDA of INR356 crores, which is 18% growth over financial year '24 and PBT of INR276 crores, which is 2% higher than last year. Our investment on content this year was INR316 crores, which was 62% higher than that of financial year '24. All of this is in sync with the strategy shared with all of you guys over the last few quarters, wherein we want to future-proof our company through aggressive new IP purchase, but at the same time, we are hedging our risk by diversifying our IP portfolio across music, live events, long-format video, short-format video and management of the content creators. The other big highlight of the year for us was that our digital footprint across YouTube, Instagram and Facebook grew from 239 million as of last year to 350 million during the year. That's a massive growth right now b

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