Key Takeaways
- Saregama’s Carvaan device sales haven’t recovered from pre-pandemic quantities as of March 31st, and may well reduce dramatically once again due to lockdowns in multiple states as the second wave of the pandemic keeps stores shut.
- Licensing revenues continue to climb steadily, with Saregama making Rs 283.9 crores in FY21 from its IP.
- Revenue from music was down from Rs 114.2 crore to Rs 101.3 crore, but increased YoY from Rs 91.7 crores.
- Overall turnover suffered in FY21 after also reducing in FY20, of which three quarters were pre-pandemic.
- The company says it will license a web series in FY22, and has wrapped up shooting for a film that will release in the coming financial year. It is not clear if the film will receive a theatrical or streaming release.
Saregama’s experiment of selling its own hardware — a music player called Carvaan pre-loaded with songs — is unusual for a music label. That strategy turned out unwise due to the pandemic, with the first wave severely impacting sales, to the point where the unit sales didn’t even recover in Q2 and Q3 of FY21. Things are looking even more grim for Carvaan, now that stores find themselves shut once again all over the country. The device sold 200,000 units in Q3FY20, which was the last pre-pandemic quarter. It has not recovered to even 3/4ths of that number in any quarter since.
“Retail network got fully operational but again starting shutting down from Mar’21 onwards,” Saregama noted in its earnings presentation. This graph, which covers the period until right at the start of the second wave, shows the device’s uphill battle:
Source: Saregama
The company’s revenue from movies has always been a small share of its earnings, but the TV productions recovered fairly quickly last year. That is also likely to be impacted in Q1FY22, with music licensing being perhaps the only stable part of the business.
Source: Saregama
Overall, the music business is growing steadily, driven by the explosion in legal methods of music consumption, such as music streaming apps and streaming video companies that are licensing music from the label for use in their web series and films. Even with certain one-time income items not included, this stream has been steadily increasing.
Financial snapshot — Q4FY21
- Revenue: ₹123.5 crore (up 14% YoY, down 8% QoQ)
- Net profit: ₹37.2 crore (up 151% YoY, up 18% QoQ)
- Music licensing revenues: ₹101.3 crore (up 10% YoY, down 11% QoQ)
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