SAREGAMA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.5

📊 Core Financials Overview

Profitability

ROE of 13.4% and ROCE of 18.0% indicate strong capital efficiency.

EPS of ₹10.7 supports a decent earnings base, though quarterly PAT declined from ₹55.5 Cr to ₹40.2 Cr.

Profit variation of 7.8% suggests stable earnings, albeit with signs of margin pressure.

Balance Sheet Strength

Zero debt is a major positive, offering financial flexibility and resilience.

Dividend yield of 0.91% adds modest income potential.

Cash Flow & Stability

Book Value of ₹81.6 vs Current Price ₹492 implies a high P/B ratio (~6.03) — premium valuation.

PEG ratio of 4.32 indicates overvaluation relative to growth.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 46.0 High vs industry PE of 32.4

P/B Ratio ~6.03 Premium valuation

PEG Ratio 4.32 Suggests overvaluation

Intrinsic Value ~₹420–₹450 Slightly below current price

The stock is moderately overvalued, especially given recent earnings softness.

🎵 Business Model & Competitive Edge

Sector: Saregama India Ltd is a leading player in music publishing, film production, and digital entertainment.

Strengths

Owns a vast library of Indian music and IP assets

Strong brand recall and monetization through Carvaan, OTT licensing, and YouTube

Zero debt and rising institutional interest (FII +0.23%, DII +0.60%)

Challenges

High valuation multiples

Declining quarterly profits

Analysts have revised earnings forecasts downward in recent months

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Despite its rich content portfolio, the company faces pressure on growth expectations and valuation sustainability.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹440–₹470

Below 50 DMA (₹494) and 200 DMA (₹503)

RSI at 50.8 suggests neutral momentum

MACD mildly positive, but volume is tapering

🧭 Long-Term Holding Guidance

Hold if Already Invested: Strong brand and IP assets support long-term potential.

Caution for New Investors: Wait for valuation to cool or earnings to stabilize.

Watchlist Triggers

EPS recovery

Margin expansion

Strategic monetization of content assets

Saregama is a unique digital content play with strong fundamentals, but current pricing demands patience and precision.

You can explore deeper insights on TopStockResearch or MarketScreener’s analyst ratings

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. Let me know if you'd like a peer comparison with Tips Industries or Shemaroo.

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www.marketscreener.com

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www.topstockresearch.com

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