Saregama India Ltd Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Abneesh Roy - Nuvama Institutional Equities - Analyst : 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 FY26, 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?

Question: Abneesh Roy - Nuvama Institutional Equities - Analyst : No, no, Q4 YoY, I'm saying Q4 YoY. It is down 8%.

Question: Abneesh Roy - Nuvama Institutional Equities - Analyst : So there was no one-off in Q4. I do understand that it's a longer-term horizon. But in terms of pushing off, was there any particular reason because anyway we are comparing Q4 to Q4, there will be a calendar, right? For the 3 months, there will be a calendar --

Question: Abneesh Roy - Nuvama Institutional Equities - Analyst : Sure. Last quick question. Recently, we saw one movie on the last day move from cinema theater to OTT. Could you tell us in terms of Hindi movies or say even for the regional, is there any churn which is happening in terms of theater versus OTT, any thinking which is again coming back. This was there in the COVID, but suddenly, last week, that development, geopolitical seem very quick about such a drastic action. So is there something more behind that because you are a veteran in that industry. Your thoughts on that?

Question: Swapnil Potdukhe - JM Financial Ltd - Analyst : 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 Ghana 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?

Question: Swapnil Potdukhe - JM Financial Ltd - Analyst : Okay. Vikram, just on that paid subscription thing, right? What would be the revenue share in your music from the subscriptions today? And secondly, yes, sorry.

Question: Swapnil Potdukhe - JM Financial Ltd - Analyst : My question is very simple. What would be the share of paid subscription in your music business today?

Question: Swapnil Potdukhe - JM Financial Ltd - Analyst : Okay. 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 FY26, at least some part of that? Will they be able to come.

Question: Swapnil Potdukhe - JM Financial Ltd - Analyst : Okay. And so that would also mean that your YouTube revenues in your music would have gone up meaningfully, right? If I'm not wrong, digital used to contribute around 70% of your total revenues, music revenues. And of that, roughly yes. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2025 / 5:30AM, SARE.NS - Q4 2025 Saregama India Ltd Earnings Call

Question: Swapnil Potdukhe - JM Financial Ltd - Analyst : Right. So -- and YouTube used to be around 33% to 35%.

Question: Swapnil Potdukhe - JM Financial Ltd - Analyst : No but intuitively, that number would have only gone up, right, from YouTube revenues.

Question: Swapnil Potdukhe - JM Financial Ltd - Analyst : Got it. And just one question. So you mentioned that you have acquired a significantly high amount of content this year, roughly around INR300-plus crores. So -- but at the same time, we are not seeing our music revenues growing in a way, right? This year, particularly, obviously, there were some one-offs and that is there. But does that also mean that the payback period for any content that you acquired already may go maybe longer than 5 years than the typical -- that we typically have, right? We -- most of your revenues come in the first year.

Question: Swapnil Potdukhe - JM Financial Ltd - Analyst : Got it. And just the last one on the Carvaan side. So obviously, the revenues are meaningfully down because of changing the strategy there. Any sense on what kind of profitability was there in the business in FY24? And where are we in FY25 right now? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2025 / 5:30AM, SARE.NS - Q4 2025 Saregama India Ltd Earnings Call

Question: Mayur Patel - 360 ONE Asset - Analyst : 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?

Question: Mayur Patel - 360 ONE Asset - Analyst : What was it? Can you plesae repeat. I missed it, sorry.

Question: Mayur Patel - 360 ONE Asset - Analyst : Understood, understood. Vikram, the idea was to just understand that excluding these shutdowns, how is the organic growth --

Question: Mayur Patel - 360 ONE Asset - Analyst : Sure. And is it like you have given a good outlook on the shift to the paid subscription based. But over next 1 year, do you think sometime during next 12 months would be the inflection point for this paid as a catalyst taking off? Or is it more like a couple of years journey?

Question: Kavish Parekh - Batlivala & Karani Securities India Pvt. Ltd. - Analyst : 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?

Question: Kavish Parekh - Batlivala & Karani Securities India Pvt. Ltd. - Analyst : Understood. On Pocket Aces following up, so FY24 had witnessed a 12-odd percent decline in terms of revenues for Pocket Aces. How did revenues grow in FY25? And did you manage to breakeven? And is there any time line for acquiring the balance 10%? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2025 / 5:30AM, SARE.NS - Q4 2025 Saregama India Ltd Earnings Call

Question: Harssh Shah - Dalal & Broacha - Analyst : A few questions from my side. So firstly, on the EBIT margin, when I look in the music vertical which --

Question: Harssh Shah - Dalal & Broacha - Analyst : Is it audible now?

Question: Harssh Shah - Dalal & Broacha - Analyst : Yes, -- is it audible now?

Question: Harssh Shah - Dalal & Broacha - Analyst : 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 -- I mean, 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? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2025 / 5:30AM, SARE.NS - Q4 2025 Saregama India Ltd Earnings Call

Question: Harssh Shah - Dalal & Broacha - Analyst : Okay. So basically, what you're indicating is a case of basically the scale.

Question: Harssh Shah - Dalal & Broacha - Analyst : Is it audible right now?

Question: Harssh Shah - Dalal & Broacha - Analyst : 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?

Question: Harssh Shah - Dalal & Broacha - Analyst : Yes, yes. Got it. Got it. Secondly, when I look at the inventory number on the balance sheet, is the understanding correct that this time around for the full year, we might have purchased less number of (inaudible) at the intangible that has increased much faster than the inventory number.

Question: Harssh Shah - Dalal & Broacha - Analyst : No. So basically, what I was trying to understand that for FY25, is it a case that we have acquired more of non-Hindi songs?

Question: Harssh Shah - Dalal & Broacha - Analyst : Got it. And one last question from my side. So on the video segment, right? So you did mention that we are in the early stages of kind of developing this vertical. But the profitability, I understand that we are in the early stages have been kind of underwhelming and definitely certain lessons we would have learned, right, so how we want to kind of build this vertical. So if you could highlight what is going to drive the profitability or maybe what steps would you be taking now to ensure that we don't burn money even though it's small in number, but we kind of grow profitably going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2025 / 5:30AM, SARE.NS - Q4 2025 Saregama India Ltd Earnings Call

Question: Harssh Shah - Dalal & Broacha - Analyst : Got it. So demerger, anything possible in terms of demerger or something like that?

Question: Jyoti Singh - Arihant Capital Markets Ltd - Analyst : 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?

Question: Jyoti Singh - Arihant Capital Markets Ltd - Analyst : Sir, like compared to earlier quarter as now, sir? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2025 / 5:30AM, SARE.NS - Q4 2025 Saregama India Ltd Earnings Call

Question: Jyoti Singh - Arihant Capital Markets Ltd - Analyst : Yes. So sir, second question is basically on the regional side. So there's a strong focus on Bhojpuri and other regional languages, but they still contribute a small portion to the overall mix.

Question: Lokesh Manik - Vallum Capital Advisors - Analyst : The first question was on the music vertical. We had a content charge of about INR85 crores last year FY24. 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, Himesh which you 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?

Question: Lokesh Manik - Vallum Capital Advisors - Analyst : Got it. My second question, Vikram, was on Video. 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. But if I add the 3 verticals, that is the web series, that is the TV, the Roja series on Sun TV and the third is now the Pocket Aces. The revenue seems to be subdued in that sense. So which vertical would you say would have gone down or not grown this year? That is one. Second is just continuing on this. Since we are still figuring out our strategy in this area, and we've still not seen any synergistic effect on music from this vertical. So becoming profitably PBT positive in the next 2 years, what factors are giving you that confidence?

Question: Lokesh Manik - Vallum Capital Advisors - Analyst : Got it. Any threat from the oversupply situation? There was an article today in Economic Times, which said there's an oversupply of content in the industry today. Producers are sitting with a lot of unsold inventory. So any threat on that front do you see or this is just temporary?

Question: Lokesh Manik - Vallum Capital Advisors - Analyst : Vikram, on the question of profitability, given we are still figuring out the strategy in this segment, just some thoughts on that.

Question: Lokesh Manik - Vallum Capital Advisors - Analyst : Right. And last one on the Events, the INR300 crores in FY25, is this a one-off? Or do we expect growth from here? So events can do INR400 crores, INR500 crores, '26, '27. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2025 / 5:30AM, SARE.NS - Q4 2025 Saregama India Ltd Earnings Call

Question: Lokesh Manik - Vallum Capital Advisors - Analyst : Any guidance here for FY25, '26 or '27?

Question: Akshay Jogani - Xponent Tribe - Analyst : I'm sorry if this question is repeated, I joined little late. I am I audible?

Question: Akshay Jogani - Xponent Tribe - Analyst : Is it better now?

Question: Akshay Jogani - Xponent Tribe - Analyst : 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 (inaudible). 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 --

Question: Akshay Jogani - Xponent Tribe - Analyst : So when we speak to OTTs, they explicitly tell us that our gross margins are 10% or less and across the Board versus Spotify globally has a much higher gross margin. So we need to get to that. And if that has to happen, then the music labels have to sort of wait before they can grow. Sort of is that something that we need to worry about? Because I think one of the reasons our growth has been slower is that shift in sort of the OTT expectations in terms of them not having to lose more money.

Question: Akshay Jogani - Xponent Tribe - Analyst : Yes. As a follow-up on this is that Spotify also recently launched the self-serve ad platform, right? I mean, which kind of indicates that they think that ads is also a way with which they can work, right? I mean do you think that, that slows down subscription for India?

Question: Aman Singh - ProfitGate Capital Services LLP - Analyst : Firstly, our music licensing business ex of artist management and the Carvaan business has grown just 3%, 4% for the full year FY25, while the comparable peer has reported 27%, 28% growth in the similar line of business. So can you help me understand the variance here?

Question: Aman Singh - ProfitGate Capital Services LLP - Analyst : Sir, a clarification. So we had a good hit rate in this financial year, while -- and we have invested in content acquisition also. So the licensing business should have grown. And if we -- so as you report in PBT and your investor presentation and the segmental reporting, we can get the music licensing business ex of Artist Management and Carvaan. So that has not shown the growth that what I was asking.

Question: Aman Singh - ProfitGate Capital Services LLP - Analyst : Sir, this is helpful. Secondly, on Dice media, can you -- so you shared the outlook on profitability in next year -- mid of next year. Can you also share what was the investment in content cost for FY25 and outlook for FY26, specifically for Dice media? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2025 / 5:30AM, SARE.NS - Q4 2025 Saregama India Ltd Earnings Call

Question: Aman Singh - ProfitGate Capital Services LLP - Analyst : Pocket Aces.