SAREGAMA 2022-23 Annual Report Analysis

Mon, 14 Aug

SAREGAMA has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

SAREGAMA Income Statement Analysis

• Operating income during the year rose 27.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 11.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 30.0% in FY23 as against 34.5% in FY22.
• Depreciation charges increased by 59.9% and finance costs increased by 26.5% YoY, respectively.
• Other income grew by 54.0% YoY.
• Net profit for the year grew by 12.6% YoY.
• Net profit margins during the year declined from 28.5% in FY22 to 25.1% in FY23.

SAREGAMA Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	5,762	7,366	27.8%
Other income	Rs m	348	536	54.0%
Total Revenues	Rs m	6,110	7,903	29.3%
Gross profit	Rs m	1,989	2,210	11.1%
Depreciation	Rs m	130	208	59.9%
Interest	Rs m	45	57	26.5%
Profit before tax	Rs m	2,162	2,481	14.8%
Tax	Rs m	518	630	21.7%
Profit after tax	Rs m	1,644	1,851	12.6%
Gross profit margin	%	34.5	30.0
Effective tax rate	%	24.0	25.4
Net profit margin	%	28.5	25.1

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SAREGAMA Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 5 billion as compared to Rs 4 billion in FY22, thereby witnessing an increase of 28.7%.
• Current assets rose 6% and stood at Rs 15 billion, while fixed assets fell 1% and stood at Rs 5 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 19 billion as against Rs 19 billion during FY22, thereby witnessing a growth of 4%.

SAREGAMA Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	13,768	13,390	-2.7
Current Liabilities	Rs m	4,260	5,482	28.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	18,680	19,444	4.1
Current assets	Rs m	14,121	14,923	5.7
Fixed Assets	Rs m	4,559	4,521	-0.8
Total Assets	Rs m	18,680	19,444	4.1

SAREGAMA Cash Flow Statement Analysis

• SAREGAMA's cash flow from operating activities (CFO) during FY23 stood at Rs 934 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -752 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -1 billion from the Rs 1 billion net cash flows seen during FY22.

SAREGAMA Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	944	934	-1.1%
Cash Flow from Investing Activities	Rs m	-6,303	-1,481	-
Cash Flow from Financing Activities	Rs m	6,772	-752	-
Net Cash Flow	Rs m	1,416	-1,360	-

Current Valuations for SAREGAMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.6, an decline from the EPS of Rs 85.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 388.1, stands at 39.2 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 10.2 times.
• The company's price to cash flow (P/CF) ratio stood at 38.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	298.9	38.2
TTM Earnings per share	Rs	85.3	9.6
Diluted earnings per share	Rs	8.5	9.6
Price to Cash Flow	x	52.5	38.3
TTM P/E ratio	x	61.0	39.2
Price / Book Value ratio	x	0.5	5.9
Market Cap	Rs m	6,851	78,864
Dividends per share (Unadj.)	Rs	3.0	3.0

Ratio Analysis for SAREGAMA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.7x during FY23, from 3.3x during FY22. 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 deteriorated and stood at 44.4x during FY23, from 48.8x during FY22. 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 13.8% during FY23, from 11.9% during FY23. 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 19.0% during FY23, from 16.0% during FY22. 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 9.8% during FY23, from 9.0% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	3.3	2.7
Debtors’ Days	Days	683	733
Interest coverage	x	48.8	44.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.0	9.8
Return on equity	%	11.9	13.8
Return on capital employed	%	16.0	19.0

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 down from Rs 399.8 to Rs 388.1, registering a loss of Rs 11.7 or around 2.9%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 13,840.3 (down 0.4%). Over the last one year it has moved up from 13,819.7 to 13,840.3, a gain of 21 points (up 0.1%).

Overall, the S&P BSE SENSEX is up 10.6% over the year.

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