Hold Saregama India; Target Of Rs 680: ICICI Direct
ICICI Direct recommended hold rating on Saregama India with a target price of Rs 680 in its research report dated October 30, 2020.
Nov 4, 2020 / 12:55 PM IST
ICICI Direct's research report on Saregama India
Saregama India's revenues for Q2FY21 fell 31.3% YoY to Rs 108.1 crore as Carvaan sales declined to 81,000 units vs. 250,000 in Q2FY20. EBITDA, however, was at Rs 36.9 crore, up 52.3% YoY, due to lower promotion costs (high marketing expense in base quarter) and contract manufacturing charges with a healthy EBITDA margins at 34.1%. Consequently, PAT came in at Rs 28.2 crore.
However, subdued Carvaan sales and delay in its ramp up will limit overall growth. We will track the strategy of converting Carvaan into a platform and its monetisation. New music acquisition spends will also be a key monitorable. We maintain HOLD rating with a revised target price of Rs 680/share at13x FY22 P/E.
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