Saregama India - Company Update - ICICI Securities

Saregama India's topline for Q4FY20 declined 14.3% YoY to Rs. 108.7 crore as Carvaan sales fell to 74,000 units in Q4FY20 vs. 214,000 in Q4FY19, mainly due to no corporate buying and lockdown impact in March. EBITDA came in at Rs. 21.5 crore, up 32% YoY, due to lower contract manufacturing charges & marketing costs. EBITDA margins at 19.8% were up 690 bps YoY. Consequently, PAT was at Rs. 15.8 crore, down 7.1% YoY.

Valuation & Outlook

The silver lining is continued traction in B2B driven by growth in OTT platforms and publishing. The movie business also provides sustainable revenue visibility with profitability now in sight. The near term challenges in Carvaan are likely to restrict overall growth in FY21. We would await fructification of product demand growth given its strategy to convert it into platform for longer visibility. Therefore, we maintain HOLD rating with a revised target price of Rs. 440/share at 14x FY22 P/E.

For details, click on the link below https://www.icicidirect.com/mailimages/IDirect_Saregama_CoUpdate_Jun20.pdf

Shares of SAREGAMA INDIA LTD. was last trading in BSE at Rs.417.4 as compared to the previous close of Rs. 440.75. The total number of shares traded during the day was 16666 in over 972 trades.

The stock hit an intraday high of Rs. 481 and intraday low of 398.1. The net turnover during the day was Rs. 7045778.

Source : Equity Bulls

Keywords