Mehabe score: 6 G Factor: 4 Piotski Score: 6 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 6.
Description
Saregama is the oldest music label company from India (established 1902, erstwhile “Gramophone Company of India” & then “HMV”). The company is aiming to be a pure-play content company supported by the global consumption boom. #
Since 2017, Saregama has been making headlines again owing to the launch of two unique initiatives, Saregama Carvaan and Yoodlee Films.
Main Points
Business Segments
Music Licensing (46% of sales), Carvaan Product Platform (40% of sales) Film & TV Segment (13% of sales), and Publication- “OPEN” Magazine (1% of sales) as of FY20.Site:SAREGAMAMain Symbol:SAREGAMA
Stock trades at 3270.0, above its 50dma 2827.18. It also trades above its 200dma 1766.17. The stock remains bullish on techicals
The 52 week high is at 3660.00 and the 52week low is at 442.65
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 59.53% CAGR over last 5 years
Weakness
– Stock is trading at 11.30 times its book value
Competition
– The industry trades at a mean P/E of 24.1x. Saregama India trades at the industry’s max P/E of 46.1x. SAREGAMA trades at a P/E of 46.1x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 8.0. SAREGAMA has a G-Factor of 4 and Piotski scoreof 6.
– Average 1 month return for industry is -1.2%. The max 1- month return was given by Saregama India: a return of 19.43 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 105.0 cr compared to Rs 76.0 cr for period ended Jun 2020, a rise of 38.2%
Operating Profits reported at Rs 37.0 cr for period ended Jun 2021 vis-vis 19.0 for period ended Jun 2020 .
Operating Margins expanded 1023.8 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 15.6 compared to Rs 21.25 for previous quarter ended Mar 2021 and Rs 9.04 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 470.0 cr for period ended TTM vis-vis sales of Rs 442.0 cr for the period ended Mar 2021, a growth of 6.0%. The 3 year sales cagr stood at -4.8%.
Operating margins expanded to 32.0% for period ended TTM vis-vis 29.0% for period ended Mar 2021, expansion of 300.0 bps.
Net Profit reported at Rs 124.0 cr for period ended TTM vis-vis sales of Rs 113.0 cr for the period ended Mar 2021, rising 8.9%.
Company recorded a healthy Net Profit CAGR of 31.9% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 190.0 cr for period ended Mar 2021 vis-vis Rs 80.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 25.0% compared to 17.0% over the last 3 Years. – The stock has given a return of 611% on a 1 Year basis vis-vis a return of 71% over the last 3 Years. – The compounded sales growth on a TTM bassis is -0% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is 103% vis-vis a compounded profit growth of 58% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 7.36% vis-vis 6.94% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 29.27% vis-vis 29.11% for Mar 2021
Conclusion
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 59.53% CAGR over last 5 years – Stock is trading at 11.30 times its book value
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 2827.18 and is trading at 3270.0, thus bullish price action wise.
