Saregama: A brief overview - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Saregama: A brief overview

Jan 13, 2004

Saregama India, (erstwhile The Gramophone Company of India), is a century old music powerhouse belonging to the RPG Group. It boasts of owning nearly 200,000 tracks, one of the largest musical archives owned by any company in the world. It has a presence at all levels of the value chain right from manufacturing to licensing software overseas and retailing of Music Cassettes (MCs) and Compact Discs (CDs). Saregama operates in three segments - music, television software and film production. The company's archives cover 13 languages across eight musical categories including ghazals, devotional and Indipop. The company sells its products under the brand name Saregama (erstwhile HMV). It has a presence in the international markets through its subsidiaries Saregama Plc. and RPG Global Music Ltd.

Rs 100 invested in

The company's fortunes are related to the fate of the Indian film industry, which had faced rough weather for a couple of years prior to 2003. Moreover, piracy in music and film industry further dented the performance of the company. To counter this, the company has reduced the price of its CDs, which affected its operating margins and also extended its music cassettes (MC) titles to CDs. Also, purchasing music rights of films under famed production banners at exorbitant amounts and subsequently the films (and consequently music) not doing well had a big negative impact on the company's financials. For FY03, the company's losses aggravated further on a deteriorating topline (down 25%). The effect of this can be seen in the chart above as the company continues to remain in the red.

However, off late, with hopes of diversifying its fortunes, the company has entered into film production and television software. After acquiring a television software house in Chennai, the company is eying Mumbai for further acquisitions. For film production, the company intends to make low cost films in the region of Rs 50-100 m (up till now the company hasn't tasted success) and has tied with various directors for the same. Moreover, the company last year tied up with Warner Home Video to market and distribute its films e.g. Harry Potter. The company has also transferred its television and film content handling to its 100% subsidiary, Saregama Films. Moreover, recent spate of musical hits like Saathiya, Koi Mil Gaya and Kuch Na Kaho, should help the company recover some lost ground.

The stock has recently run up on the bourses over the last couple of months to the current levels of Rs 97. However, the rise seems more a factor of the buying frenzy being witnessed on the bourses, including media stocks. Going forward, with the film industry, once again, on the recovery path and various stringent measures being adopted against film and music piracy by the industry, the stock could face better times. Further, with the company having learnt from its past mistakes, has been renegotiating contracts and signing new contracts at realistic prices, which tends to provide a lower minimum guarantee (MG) while acquiring music rights. Further, with the television industry on a growth path and with prospects looking bright over the next couple of years, Saregama, which is also into television software production, could stand to gain.

Equitymaster requests your view! Post a comment on "Saregama: A brief overview". Click here!


More Views on News

SAREGAMA Announces Quarterly Results (4QFY20); Net Profit Up 41.7% (Quarterly Result Update)

Jun 8, 2020 | Updated on Jun 8, 2020

For the quarter ended March 2020, SAREGAMA has posted a net profit of Rs 228 m (up 41.7% YoY). Sales on the other hand came in at Rs 1 bn (down 15.0% YoY). Read on for a complete analysis of SAREGAMA's quarterly results.

More Views on News

Most Popular

A Critical Update on the Market (Fast Profits Daily)

Mar 30, 2021

In this video, I'll tell you why I am recommending caution in the market at this time.

My Recent Recommendation Will Profit from the Global Supply Chain Crisis (Profit Hunter)

Mar 31, 2021

A tiny chemical company, started in the Licence Raj era, is a great example of a new wealth creating opportunity.

My Stock Trading Strategy (Fast Profits Daily)

Mar 31, 2021

In this video I'll show you exactly how I go about picking stocks for trading.

What You Need to Find Hundred Baggers (Profit Hunter)

Mar 30, 2021

100 baggers of the last decade share this common trait. Here's how to use it to nail future multibaggers.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Apr 9, 2021 (Close)


  • Track your investment in SAREGAMA with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks