SAREGAMA 2021-22 Annual Report Analysis

Thu, 14 Jul

SAREGAMA has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

SAREGAMA Income Statement Analysis

• Operating income during the year rose 31.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 43.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 32.2% in FY22 as against 29.4% in FY21.
• Depreciation charges increased by 133.5% and finance costs increased by 30.9% YoY, respectively.
• Other income grew by 13.1% YoY.
• Net profit for the year grew by 34.5% YoY.
• Net profit margins during the year grew from 25.7% in FY21 to 26.3% in FY22.

SAREGAMA Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	4,420	5,806	31.4%
Other income	Rs m	309	349	13.1%
Total Revenues	Rs m	4,728	6,155	30.2%
Gross profit	Rs m	1,301	1,871	43.8%
Depreciation	Rs m	56	131	133.5%
Interest	Rs m	35	45	30.9%
Profit before tax	Rs m	1,519	2,044	34.6%
Tax	Rs m	384	518	34.7%
Profit after tax	Rs m	1,135	1,526	34.5%
Gross profit margin	%	29.4	32.2
Effective tax rate	%	25.3	25.3
Net profit margin	%	25.7	26.3

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SAREGAMA Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 4 billion as compared to Rs 3 billion in FY21, thereby witnessing an increase of 22.2%.
• Current assets rose 152% and stood at Rs 14 billion, while fixed assets rose 29% and stood at Rs 5 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 19 billion as against Rs 9 billion during FY21, thereby witnessing a growth of 105%.

SAREGAMA Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	5,037	13,768	173.4
Current Liabilities	Rs m	3,485	4,260	22.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	9,129	18,680	104.6
Current assets	Rs m	5,605	14,121	151.9
Fixed Assets	Rs m	3,523	4,559	29.4
Total Assets	Rs m	9,129	18,680	104.6

SAREGAMA Cash Flow Statement Analysis

• SAREGAMA's cash flow from operating activities (CFO) during FY22 stood at Rs 944 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -6 billion, an improvement of 363.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 7 billion, an improvement of 1,469% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 1 billion from the Rs 41 million net cash flows seen during FY21.

SAREGAMA Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	1,897	944	-50.2%
Cash Flow from Investing Activities	Rs m	-1,361	-6,303	-
Cash Flow from Financing Activities	Rs m	-495	6,772	-
Net Cash Flow	Rs m	41	1,416	3,363.6%

Current Valuations for SAREGAMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.9, an decline from the EPS of Rs 65.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 397.3, stands at 50.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.6 times, while the price to sales ratio stands at 13.2 times.
• The company's price to cash flow (P/CF) ratio stood at 41.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	253.6	30.1
TTM Earnings per share	Rs	65.1	7.9
Diluted earnings per share	Rs	5.9	7.9
Price to Cash Flow	x	25.8	41.3
TTM P/E ratio	x	27.1	50.2
Price / Book Value ratio	x	3.4	5.0
Market Cap	Rs m	16,901	68,505
Dividends per share (Unadj.)	Rs	2.0	3.0

Ratio Analysis for SAREGAMA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.3x during FY22, from 1.6x during FY21. 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 46.2x during FY22, from 45.0x during FY21. 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 declined and down at 11.1% during FY22, from 22.5% during FY22. 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 declined and down at 15.2% during FY22, from 30.8% during FY21. 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 declined and down at 8.4% during FY22, from 12.8% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.6	3.3
Debtors’ Days	Days	721	678
Interest coverage	x	45.0	46.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.8	8.4
Return on equity	%	22.5	11.1
Return on capital employed	%	30.8	15.2

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 342.4 to Rs 397.3, registering a gain of Rs 54.9 or around 16.0%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 12,418.2 (down 1.1%). Over the last one year it has moved down from 13,174.2 to 12,418.2, a loss of 756 points (down 5.7%).

Overall, the S&P BSE SENSEX is up 2.0% 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