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SAREGAMA 2020-21 Annual Report Analysis

Wed, 31 Mar

SAREGAMA has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

SAREGAMA Income Statement Analysis

• Operating income during the year fell 15.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 115.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 29.4% in FY21 as against 11.6% in FY20.
• Depreciation charges increased by 21.0% and finance costs decreased by 48.6% YoY, respectively.
• Other income grew by 174.8% YoY.
• Net profit for the year grew by 160.9% YoY.
• Net profit margins during the year grew from 8.3% in FY20 to 25.7% in FY21.

SAREGAMA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	5,215	4,420	-15.2%
Other income	Rs m	112	309	174.8%
Total Revenues	Rs m	5,327	4,728	-11.2%
Gross profit	Rs m	605	1,301	115.2%
Depreciation	Rs m	46	56	21.0%
Interest	Rs m	67	35	-48.6%
Profit before tax	Rs m	603	1,519	151.7%
Tax	Rs m	169	384	128.1%
Profit after tax	Rs m	435	1,135	160.9%
Gross profit margin	%	11.6	29.4
Effective tax rate	%	27.9	25.3
Net profit margin	%	8.3	25.7

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SAREGAMA Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 3 billion as compared to Rs 3 billion in FY20, thereby witnessing an increase of 33.7%.
• Current assets rose 37% and stood at Rs 6 billion, while fixed assets rose 17% and stood at Rs 4 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 9 billion as against Rs 7 billion during FY20, thereby witnessing a growth of 28%.

SAREGAMA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	3,934	5,037	28.0
Current Liabilities	Rs m	2,606	3,485	33.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	7,109	9,129	28.4
Current assets	Rs m	4,092	5,605	37.0
Fixed Assets	Rs m	3,017	3,523	16.8
Total Assets	Rs m	7,109	9,129	28.4

SAREGAMA Cash Flow Statement Analysis

• SAREGAMA's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 139.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -1 billion, an improvement of 2,610.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -495 million, an improvement of 32% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 41 million from the Rs 20 million net cash flows seen during FY20.

SAREGAMA Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	793	1,897	139.1%
Cash Flow from Investing Activities	Rs m	-50	-1,361	-
Cash Flow from Financing Activities	Rs m	-725	-495	-
Net Cash Flow	Rs m	20	41	99.9%

Current Valuations for SAREGAMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 65.1, an improvement from the EPS of Rs 25.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,594.1, stands at 270.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 61.0 times, while the price to sales ratio stands at 6.3 times.
• The company's price to cash flow (P/CF) ratio stood at 14.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	299.2	253.6
TTM Earnings per share	Rs	25.0	65.1
Diluted earnings per share	Rs	2.3	5.9
Price to Cash Flow	x	78.6	14.2
TTM P/E ratio	x	87.0	270.9
Price / Book Value ratio	x	1.8	3.4
Market Cap	Rs m	7,005	16,901
Dividends per share (Unadj.)	Rs	0.2	2.0

Ratio Analysis for SAREGAMA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY21, from 1.6x during FY20. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 45.0x during FY21, from 10.0x during FY20. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 22.5% during FY21, from 11.1% during FY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 30.8% during FY21, from 17.0% during FY20. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 12.8% during FY21, from 7.1% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	1.6	1.6
Debtors’ Days	Days	759	721
Interest coverage	x	10.0	45.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.1	12.8
Return on equity	%	11.1	22.5
Return on capital employed	%	17.0	30.8

To see how SAREGAMA has performed over the last 5 years, please visit here.

SAREGAMA Share Price Performance

Over the last one year, SAREGAMA share price has moved up from Rs 196.3 to Rs 1,594.1, registering a gain of Rs 1,397.9 or around 712.3%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 11,919.9 (down 0.9%). Over the last one year it has moved up from 6,403.4 to 11,919.9, a gain of 5,517 points (up 86.1%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

(To know more, check out historical annual results for SAREGAMA and quarterly results for SAREGAMA)

Read: Latest Annual Report Analysis of SAREGAMA