Why Spotify music distributor Saregama's stock went out of tune today?

Saregama India shares declined 3.8 per cent in trade and registered an intraday low of Rs 515.55 per share on NSE. The counter saw selling after the company reported a slip in consolidated net profit and adjusted Earnings before interest, tax, depreciation and amortisation (Ebitda) year-on-year (Y-o-Y) in Q2FY25. 

 

Around 12:35 PM, Saregama shares were down 3.24 per cent at Rs 518.95 per share on BSE. In comparison, the NSE Nifty was down 0.45 per cent at 23,887.1. The market capitalisation of the company stood at Rs 10,005.85 crore. The 52-week high of the stock was at Rs 688.9 per share on NSE and 52-week low of the stock was at Rs 325.85 per share.

 

 

On Tuesday, during market hours, Saregama India logged a consolidated net profit at Rs 44.9 crore, down 6.6 per cent from Rs 48.1 crore a year ago. 

 

Its expenses also increased by 62.6 per cent to Rs 195.06 crore as compared to Rs 119.95 crore a year ago. 

 

However, the company's revenue from operations for the quarter under review stood at Rs 241.83 crore as compared to Rs 172.35 crore which implies a rise of 40.3 per cent year-on-year (Y-o-Y). 

 

Similarly, its total income for the second quarter also increased 37 per cent to Rs 254.36 crore from Rs 185.55 crore a year ago. 

 

As per the filing, the adjusted Ebitda stood at Rs 84.2 crore as compared to Rs 72 crore a year ago. 

 

The Ebitda margins of the company for the September quarter stood at 35 per cent as compared to 42 per cent a year ago. However it increased quarter-on-quarter (Q-o-Q) by 200 basis points (bps). 

 

Saregama India Limited is a subsidiary of the RP-Sanjiv Goenka Group and is one of India’s oldest and most renowned music and entertainment companies, with a legacy that dates back to 1901. 

 

Originally founded as The Gramophone Company of India, Saregama owns one of the largest and most diverse music catalogs in the country, with over 1.3 million songs spanning across various genres, including Bollywood, classical, regional, and devotional music. 

 

The company distributes its music through digital platforms like Spotify, Apple Music, and YouTube, as well as traditional formats such as CDs and vinyl. Saregama has expanded beyond music distribution by producing and distributing films and TV shows. 

 

The company generates revenue through licensing its music to films, TV shows, advertisements, and streaming platforms, along with earnings from its innovative digital products. 

 

In the past one year, Saregama shares have gained 52.6 per cent against Nifty's rise of 23 per cent.