SAREGAMA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 3.9

🎵 Saregama India Ltd shows solid profitability, zero debt, and a strong brand portfolio, though recent earnings softness and technical weakness suggest caution in the short term.

📈 Positive

• Debt-Free: Debt-to-equity ratio of 0.00 reflects excellent financial discipline.
• Healthy Returns: ROCE of 18.0% and ROE of 13.4% indicate efficient capital use.
• Strong EPS: ₹10.7 supports long-term earnings visibility.
• Dividend Yield: 0.99% offers modest income for shareholders.
• Brand Strength: Owns iconic music IP and diversified media assets across music, film, and digital platforms.

⚠️ Limitation

• High PEG Ratio: 3.99 suggests valuation may be stretched relative to growth.
• Technical Weakness: RSI at 41.8 and MACD at -5.41 indicate bearish momentum.
• Declining PAT: ₹40.2 Cr. vs ₹55.5 Cr. in previous quarter shows short-term pressure.
• Trading Below DMA: Current price is below both 50 DMA and 200 DMA.

📉 Company Negative News

• Quarterly profit declined 27.6%, raising concerns over margin compression.
• Stock down nearly 25% from 52-week high, reflecting investor caution.
• Minor decline in DII holdings (-0.07%) signals domestic hesitation.

📈 Company Positive News

• Five-year return of 1,325.5% driven by 10.1% quarterly revenue growth and 25.2% profit margin

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• FII holdings increased by 0.14%, showing foreign investor confidence.
• Analysts project long-term growth from digital IP monetization and expansion into OTT and live entertainment

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🏭 Industry

• Entertainment sector is growing with rising digital consumption and OTT penetration.
• Industry P/E of 44.3 suggests Saregama trades slightly below sector average.
• Peers include Tips Industries, Nazara Technologies, and PVR INOX

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🧾 Conclusion

• Entry Zone: ₹430–₹445 could be a favorable accumulation range based on RSI and support levels.
• Long-Term View: Hold for 3–5 years; strong IP portfolio and digital strategy support sustained growth.
• Valuation Watch: Monitor earnings recovery and MACD reversal before aggressive accumulation.

Sources

stockpricearchive.com

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