Saregama India reports 20.6% EBITDA growth in 2016 and almost no change in EBITDA Margin of 6.6%
25-05-2016 • About Saregama India (
$SAREGAMA) • By InTwits
Saregama India reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Saregama India is a growth stock: FY2016 revenue growth was 18.7%, 5 year revenue CAGR was 10.1% at FY2016 ROIC 5.1%
- Saregama India has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.1%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: ₹42m in FY2016, ₹35m in FY2015, ₹42m in FY2014, ₹181m in FY2013, ₹10m in FY2012
- The company has potentially unprofitable business model: ROIC is 5.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Saregama India's Revenue surged on 18.7%. During the last 5 years Revenue growth bottomed in FY2014 at -4.6% and was accelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 26.3 pp from 5.7% to -20.6% in FY2016. EBITDA Margin declined at -1.3 pp per annum in the last 5 years.
Net Income margin decreased slightly on 0.54 pp from 3.6% to 3.1% in FY2016. During the last 5 years Net Income margin topped in FY2014 at 10.7% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 3.3%. The company showed almost no change in CAPEX/Revenue from FY2013 to FY2016. For the last three years the average CAPEX/Revenue was 3.1%. The company invested a big chunk of EBITDA (50.2%) to CAPEX to fuel its growth.
Return on investment
The company operates at low ROIC (5.1%) and ROE (4.0%). ROIC increased slightly on 1.7 pp from 3.4% to 5.1% in FY2016. ROE showed almost no change in FY2016. During FY2012-FY2016 ROE topped in FY2014 at 13.6% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.5x and Debt / EBITDA is 0.2x. Debt dropped on 53.6% while cash jumped on 379%.
Saregama India has no short term refinancing risk: cash is higher than short term debt (716.5%).
Financial and operational results
Saregama India ($SAREGAMA) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,602 | 1,860 | 1,775 | 1,865 | 2,215 | 18.7% |
| EBITDA | 197 | 159 | 174 | 121 | 146 | 20.6% |
| Net Income | 11 | 81 | 189 | 68 | 68 | 1.0% |
Balance Sheet
|
|---|
| Cash | 112 | 116 | 99 | 54 | 259 | 379.1% |
| Short Term Debt | 572 | 588 | 93 | 78 | 36 | -53.6% |
| Long Term Debt | 19 | 20 | 33 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 44 | 63 | 76 | 34 | 73 | 113.3% |
Ratios
|
|---|
| Revenue growth | 16.9% | 16.1% | -4.6% | 5.1% | 18.7% | |
| EBITDA growth | 341.2% | -18.9% | 9.1% | -30.4% | 20.6% | |
|
|---|
| EBITDA Margin | 12.3% | 8.6% | 9.8% | 6.5% | 6.6% | 0.1% |
| Net Income Margin | 0.7% | 4.4% | 10.7% | 3.6% | 3.1% | -0.5% |
| CAPEX, % of revenue | 2.7% | 3.4% | 4.3% | 1.8% | 3.3% | 1.5% |
|
|---|
| ROIC | 4.1% | 1.7% | 8.2% | 3.4% | 5.1% | 1.7% |
| ROE | 1.0% | 7.4% | 13.6% | 4.1% | 4.0% | -0.1% |
| Net Debt/EBITDA | 2.4x | 3.1x | 0.2x | 0.2x | -1.5x | -1.7x |
Peers in Movies & Entertainment
Below we provide Saregama India benchmarking against other companies in Movies & Entertainment industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Prime Focus ($PFOCUS) | 53.5% | -1.3% | 10.8% | 82.2% | - |
| Eros International Media ($EROSMEDIA) | 33.5% | 13.1% | 6.2% | 25.3% | - |
| Shemaroo Entertainment ($SHEMAROO) | - | 18.0% | 23.2% | 21.7% | 16.2% |
| Dq Entertainment (International) ($DQE) | 9.3% | 1.0% | 4.5% | -40.6% | - |
| Sri Adhikari Brothers Television Network ($SABTN) | 167.5% | 22.2% | 11.9% | -42.6% | - |
| |
|---|
| Median (6 companies) | 21.4% | 15.6% | 9.5% | -9.5% | -8.5% |
|---|
| Saregama India ($SAREGAMA) | - | 16.1% | -4.6% | 5.1% | 18.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Eros International Media ($EROSMEDIA) | 61.2% | 65.7% | 67.6% | 61.2% | - |
| Picturehouse Media ($PICTUREHS) | - | - | - | 54.1% | - |
| Dq Entertainment (International) ($DQE) | 41.8% | 48.8% | 40.2% | 50.5% | - |
| Sri Adhikari Brothers Television Network ($SABTN) | 7.5% | 24.7% | 27.5% | 43.7% | - |
| Mukta Arts ($MUKTAARTS) | 6.4% | 4.0% | 1.0% | 29.8% | - |
| |
|---|
| Median (10 companies) | 23.1% | 26.2% | 27.5% | 28.4% | 21.9% |
|---|
| Saregama India ($SAREGAMA) | 12.3% | 8.6% | 9.8% | 6.5% | 6.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sri Adhikari Brothers Television Network ($SABTN) | 28.9% | 5.1% | 9.4% | 126.7% | - |
| Prime Focus ($PFOCUS) | 24.3% | 19.8% | - | 20.8% | - |
| Shemaroo Entertainment ($SHEMAROO) | 2.3% | 0.9% | 0.7% | 0.7% | 1.3% |
| Dq Entertainment (International) ($DQE) | 5.5% | 2.0% | 0.0% | 0.6% | - |
| Picturehouse Media ($PICTUREHS) | - | - | - | 0.5% | - |
| |
|---|
| Median (6 companies) | 8.1% | 2.0% | 0.4% | 0.6% | 2.3% |
|---|
| Saregama India ($SAREGAMA) | 2.7% | 3.4% | 4.3% | 1.8% | 3.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shemaroo Entertainment ($SHEMAROO) | 23.5% | 22.9% | 21.0% | 21.8% | 21.3% |
| Eros International Media ($EROSMEDIA) | 18.4% | 15.2% | 17.6% | 17.7% | - |
| Picturehouse Media ($PICTUREHS) | 15.6% | 17.3% | 16.9% | 12.0% | - |
| Sri Adhikari Brothers Television Network ($SABTN) | -4.4% | 7.1% | 10.6% | 4.8% | - |
| Dq Entertainment (International) ($DQE) | 9.4% | 9.3% | 6.2% | 3.4% | - |
| |
|---|
| Median (13 companies) | 4.7% | 8.4% | 10.6% | 8.4% | -1.4% |
|---|
| Saregama India ($SAREGAMA) | 4.1% | 1.7% | 8.2% | 3.4% | 5.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Picturehouse Media ($PICTUREHS) | 6.2x | 3.7x | 3.4x | 7.0x | 0.0x |
| Dq Entertainment (International) ($DQE) | 1.8x | 1.9x | 2.8x | 5.0x | - |
| Prime Focus ($PFOCUS) | 1.9x | 3.5x | - | 3.6x | - |
| Sri Adhikari Brothers Television Network ($SABTN) | 16.1x | 3.5x | 2.5x | 3.0x | - |
| Shemaroo Entertainment ($SHEMAROO) | 1.7x | 1.9x | 2.3x | 1.2x | 1.8x |
| |
|---|
| Median (9 companies) | 1.9x | 2.1x | 2.3x | 1.2x | 0.0x |
|---|
| Saregama India ($SAREGAMA) | 2.4x | 3.1x | 0.2x | 0.2x | -1.5x |
