Most investors look at Saregama and see a music company. The smarter lens is to see it as a content IP business — one that collects royalties on songs for 60+ years after the initial investment.
Here are several data points that reinforce exactly why this business model is structurally differentiated, but before that:
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Saregama – Interesting details from Concall
FINANCIALS AT A GLANCE
- Operating Revenue: â‚ą260 crores | Operating PBT: â‚ą76.5 crores
- One-time non-cash charge of ₹7 crores (new Labour Code) → Reported profit: ₹69.5 crores
- Adjusted EBITDA this quarter: 46% (management cautions this is an aberration)
- Long-term adjusted EBITDA guidance maintained: 32%–33%
MUSIC SEGMENT — THE CORE ENGINE
- Music grew 29% YoY this quarter; 18% for the first 9 months of FY26
- Management guiding for full-year FY26 music growth of 17%–18%
- Medium-to-long-term guidance: 21%–23% annual music revenue growth
- Key driver: New content investment — not just the legacy catalogue
- Revenue split (FY25 data): 56% from 21st century music, 44% from legacy catalogue (Kishore Kumar, Rafi, Lata era)
- Industry grows 5%–8%; Saregama’s excess growth comes from rising market share in new music
BHANSALI PRODUCTIONS — A STRATEGIC MOAT
- Saregama acquired a significant minority stake, deal closed January 30, 2026
- Valuation linked to Bhansali Productions’ financial performance over 3 years — rewards future performance over past brand value
- Key benefit: Exclusive, pre-agreed access to all Bhansali film music — no bidding wars
- Saregama gets financial oversight; creative control stays with Sanjay Leela Bhansali
- Option (not obligation) to increase stake to 51% by 2030
- Big films in pipeline: Love & War (Q2 FY27) and Nani’s Paradise (Q1 FY27)
ARTIST MANAGEMENT & LIVE EVENTS
- 270+ artists managed; 300 million+ followers across Instagram and YouTube
- 60 new artists added this quarter alone
- Revenue model: Saregama makes artists big through its content platform → earns a share of live events, weddings, and brand deals
- Live events targeting high single-digit margins in steady state; capital-light model (cash recycled in 30–40 days)
- Events revenue is intentionally lumpy — management asks investors to strip out one-offs like Diljit’s India tour (Q3 FY25) when evaluating trend growth
SUBSCRIPTION — THE OPTION VALUE
- India’s paid music streaming penetration: ~1% today
- Management’s thesis: Once Spotify and Saavn push users behind a paywall (like Amazon Music/Apple/Gaana already have), India could see 100 million paid subscribers at â‚ą90–₹100/month
- This potential is NOT baked into the 21%–23% guidance — it’s pure upside
- Saregama is skewing new content spend towards languages where paid subscription adoption is expected to happen first
WHAT TO WATCH
- Post FY27, content spend growth expected to moderate to inflation-linked 6%–10% annually (vs. 30%–50% in recent years)
- Pocket Aces (influencer/video arm): Moving from ₹10 crore loss → breakeven in FY26; guided 25% CAGR post-breakeven
- In-house films business being wound down over 12–15 months; short-format video (FilterCopy, web series) continues
- New content spend for FY26: ₹275–300 crores (lower than planned due to movie release delays)
- Total 3-year content investment guidance (FY25–FY27): ~₹1,000 crores
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Ekansh Mittal
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