SAREGAMA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 3.9

📊 Financials: Saregama has a market cap of ₹6,785 Cr. Current price is ₹352 with a 52-week high/low of ₹604/₹340. PAT this quarter is ₹47.6 Cr vs ₹40.2 Cr in the previous quarter, showing growth, though quarterly profit variation is slightly negative (-2.87%). ROCE at 18.0% and ROE at 13.4% indicate strong efficiency. Debt-to-equity ratio of 0.00 reflects a debt-free balance sheet.

💹 Valuation: Stock P/E is 33.2, slightly below industry PE of 39.2, suggesting fair valuation. Book value is ₹86.1, giving a P/B ratio of ~4.1. PEG ratio at 3.11 indicates stretched valuation relative to growth. EPS is ₹10.6, showing consistent profitability. Dividend yield of 1.31% adds shareholder value.

🏭 Business Model: Saregama operates in music publishing, IP monetization, and digital entertainment. Competitive advantage lies in its vast music library, strong brand recall, and diversified revenue streams (digital, physical, and licensing). Business model is asset-light and scalable, driven by content consumption trends.

📈 Entry Zone: Technically, DMA 50 (₹404) and DMA 200 (₹463) are above current price, showing bearish trend. Entry is favorable near ₹340–₹360 if price consolidates. Current RSI at 33.9 indicates oversold conditions, offering potential accumulation opportunity.

🕰️ Long-Term Holding: Strong ROCE, debt-free status, and valuable IP portfolio support long-term compounding. Investors can accumulate on dips near support zones, while monitoring valuation multiples.

Positive

• ✅ Strong ROCE (18.0%) and ROE (13.4%)
• ✅ Debt-free balance sheet (0.00 debt-to-equity)
• ✅ Dividend yield of 1.31%
• ✅ Large IP portfolio and strong brand recall

Limitation

• ⚠️ High P/B ratio (~4.1)
• ⚠️ PEG ratio elevated (3.11)
• ⚠️ Quarterly profit variation negative (-2.87%)

Company Negative News

• 📉 DII holding reduced (-0.07%)
• 📉 Bearish technical trend (DMA 50 & 200 above CMP)

Company Positive News

• 📈 FII holding increased (+0.14%)
• 📈 Quarterly PAT growth (40.2 Cr → 47.6 Cr)

Industry

• 🏭 Entertainment industry PE at 39.2 highlights growth potential
• 🏭 Sector driven by digital consumption and IP monetization

Conclusion

🔎 Saregama is fundamentally strong with high ROCE, debt-free balance sheet, and valuable IP assets. Valuations are slightly stretched, but oversold technicals offer accumulation opportunities near ₹340–₹360. Long-term investors can hold for compounding, supported by dividend yield and digital growth trends.

Would you like me to extend this with a peer benchmarking overlay comparing Saregama against other entertainment/IP monetization companies, or a sector scan to highlight undervalued digital media players?