Saregama India Q2 FY27 Earnings Call: Reiterates 20-23% Music CAGR, Rs. 1,200 Cr Content Spend Through FY30

Saregama India Ltd held its Q2 FY27 earnings call on November 04, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Strong Quarter, But Management Urges a 12-Month Lens

• Revenue from operations of Rs.3,143mn (+37% YoY) — Q2 FY 2026-2027 adjusted EBITDA came in at Rs.1,180mn (+39% YoY) and operational PBT at Rs.858mn (+43% YoY).
• Music vertical (licensing, artist management, retail) posted Rs.2,513mn revenue (+35% YoY) — with EBITDA of Rs.1,540mn (+37% YoY) and net margin of Rs.1,165mn (+46% YoY) in Q2 FY 2026-2027; management cautioned growth was flattered by a low base in H1 FY 2025-2026.
• Music EBIT margin expanded ~700bps YoY to 55.4% — from 48.4% in Q2 FY 2025-2026, driven by content investments made in FY24, FY25 and FY26 now generating revenue increases far exceeding content cost charge-offs.
• Management repeatedly advised against judging single quarters — Q2 FY 2026-2027 numbers fluctuate with release timing and marketing cost booking; a new 12-month rolling view in the presentation shows steady improvement across all music-side parameters.
• Video vertical revenue fell 16% YoY to Rs.183mn — following the conscious decision to wind down the film business in favor of investing in Bhansali Productions; revenue may decline further in coming quarters as the transition plays out.

20-23% CAGR Reiterated; Reporting Pool Clarified

• Music vertical guided at a 20-23% revenue CAGR on a 3-5 year basis — with 60-65% EBITDA margin over the short-to-medium term (period unspecified); management explicitly declined to give per-year guidance, noting annual numbers may run above or below the CAGR.
• Guidance applies to the combined music pool — responding to analyst Pritesh Chheda (Lucky Investments) flagging three differing Q2 FY 2026-2027 figures (Rs.200 crore segmental, Rs.250 crore slide 10, Rs.230 crore slide 22), MD Vikram Mehra explained the combined pool (licensing + artist management + retail) is the guidance basis, growing at 20-23% CAGR from the FY 2026-2027 base.
• Reconciliation confirmed — Q2 FY 2026-2027 segmental music revenue of Rs.200 crore comprises ~Rs.179 crore licensing and ~Rs.21 crore retail (Carvaan); the Rs.250 crore slide 10 figure is the combined music pool; the Rs.230 crore slide 22 figure was not separately reconciled in the exchange.
• Digital vs non-digital split not quantified — management called it competitor-sensitive data but confirmed the bulk of revenue is digital; within non-digital, brand licensing and public performance are growing decently while TV channels and radio are growing much slower (no figures disclosed).
• Analyst Harsh (JM Financial PMS) asked whether 25-30% artist management growth could sustain — given H1 FY 2026-2027 growth of ~100% and an assumed ~Rs.200 crore FY 2026-2027 run-rate; management declined vertical-wise projections, reiterating only the combined 20-23% music CAGR guidance.

Rs.300-350 Cr FY27 Spend; ~Rs.1,200 Cr Through FY30

• Rs.300-350 crore new content spend guided for FY 2026-2027 — with budgets to rise ~10% per annum thereafter; building from the FY27 midpoint of Rs.325 crore, management guided ~Rs.1,200 crore of combined new content spends across FY 2027-2028 through FY 2029-2030.
• Bhansali Productions (SLB) clarified as part of the same content kitty — not a separate deal; the structure comprises an equity stake on the company side plus a separate music deal under which Saregama pays for every piece of content acquired, including a separate payment for "Love and War".
• H2 FY 2026-2027 leans on film albums — Sanjay Leela Bhansali's Love and War, Shiva Karthikeyan's Sion, Dharma's Kartik Aryan Style and Nag Zilla, and a Tiger Shroff film produced by Bhansali; the biggest Q2 FY 2026-2027 film hit was the Telugu album Paradise, whose song "Yesha Nagulla" hit global #1 on YouTube's daily music video charts.
• 60% of FY 2025-2026 music revenue came from post-2000 music — positioning Saregama as a "new age IP company"; the 180,000+ song catalog is growing by 4,500-5,000 releases a year, with standing guidance of a 5-year payback on new music followed by 55-75 years of returns (period unspecified).
• Old film IPs are largely licensed out on 5-, 7- or 12-year terms — with full revenue and the entire associated cost recognized in the year each deal was executed.

Owned-IP Events Weigh on Near-Term P&L by Design

• Events revenue of Rs.45 crore in Q2 FY 2026-2027 and Rs.61 crore in H1 — already close to the full FY26 total of Rs.62 crore; Q3-Q4 FY 2026-2027 are seasonally the strongest live quarters (analyst noted).
• Events posted a Q2 FY 2026-2027 loss despite reasonable revenues — attributed to the conscious shift from artist-based concerts to owned IP events (Unforty music festival, Ha Kar stand-up comedy, Krishna devotional concert, Karma Live), whose initial-run investments are expensed rather than capitalized; profitability would look better running only artist-based concerts, but the company would have "no control on our destiny".
• 54 Karva Live shows served ~10,000 attendees in Q2 FY 2026-2027 — plus the Ilayaraja US tour across 11 cities serving 20,000 attendees and 17 devotional shows; H2 FY 2026-2027 pipeline includes Guru Randhawa, Unforty, Aha Kar and a larger artist tour yet to be announced; Saregama is not working with Diljit Dosanjh for the current India season as the financials did not work out.
• 340 artists represented with 450mn+ combined Instagram/YouTube followers at end-Q2 FY 2026-2027 — per the latest E&Y report, digital advertising is growing 14%+ per annum, and management expects the artist/influencer economy to be its biggest beneficiary.
• 20+ brand partnership deals closed in Q2 FY 2026-2027 — including Apple, Airbnb, Google, Cadbury and Tanishq; a high-margin stream built alongside licensing.
• Events are listed on both BookMyShow and District by Zomato — platforms charge a nominal back-end fee while event P&L remains with Saregama; management positions itself as the only music label globally with direct customer relationships versus an otherwise B2B industry.

Fighting Unlicensed AI Covers; Pricing Engine Seen From FY29

• Two dedicated AI teams are operating — a content team using Gen AI for neighboring audio content with ~100 hours of podcast content slated for release in Q3 FY 2026-2027, and a process-optimization team already delivering marginal manpower cost savings, with full impact expected over the next few quarters.
• Management is "very bullish" that AI will benefit large IP owners like Saregama — but will "constantly fight against unlicensed exploitation"; the bigger near-term issue is unlicensed AI covers/remakes (not AI originals), tracked via technology to either buy them out or pull them down, with dialogue opened with AI creators so Saregama can own/distribute AI versions of its biggest songs.
• Industry context cited by management — Universal Music has called for AI-generated filler to be paid less than human artistry, and Spotify is building licensed remix/cover features with right holders' consent, credit and compensation; new Saregama digital licensing agreements embed protection against rights dilution and fraud.
• An E&Y-IMI study found 64% of free music users are ready to shift to a reasonably priced paid service — if the free tier stops; in India, growth is currently entirely from new subscribers, with pricing — the second engine — hoped to kick in 2-3 years from now (~FY 2028-2029 onwards).
• Shorts monetization (Instagram Reels, YouTube Shorts) remains fixed-fee — Saregama wants a share-of-advertising basis but this has not happened yet and no timeline was committed; management will share an update only when the structure changes.

Unallocable Cost Bridge, Carvaan Testing, 20-Year Framing

• Unallocable expenditure rose to Rs.27 crore in FY 2026-2027 from Rs.18 crore in FY 2025-2026 — CFO Abhishek Kapoor said the entire increase stems from other income declining 55% YoY (netted off against unallocable costs); excluding that impact, unallocable costs are flat YoY; sequentially, costs rose Rs.6 crore in Q2 vs Q1 FY 2026-2027 on provisions and legal items.
• Four-year rise in unallocable costs attributed to lost interest income on QIP money — deployed into Pocket Aces, a Haryanvi catalog acquisition, and a position in Bhansali; management said these investments should hopefully more than compensate for the lost interest income.
• Current liabilities increased over Rs.100 crores in H1 FY 2026-2027 — a key driver of the strong reported half-year CFO, per analyst Ranjit Verma; CFO Kapoor attributed the bump to customer advances received at varying periodicities, against which revenues will accrue over time.
• Carvaan app and Carvaan Club remain in the testing phase through FY 2026-2027 — targeting middle-to-older age users as a community play (not a hardcore streaming app); the app push and fuller disclosure of operational metrics (e.g., paid subscribers) expected in the next 4-6 months from the call (roughly Q4 FY 2026-2027 to Q1 FY 2027-2028), with more details promised by end of FY 2026-2027; no monetization plan or engagement targets disclosed yet, and management is not currently spending on these initiatives.
• Investees progressing — Pocket Aces broke even in FY 2025-2026 and is moving toward profitability in FY 2026-2027; Bhansali Productions is gearing up for its biggest release, Love and War, in Q4 FY 2026-2027 and is actively building its FY 2027-2028 slate.
• Management framed a 20-year opportunity — citing ISPI data that global recorded music grew to US$31.7bn in 2025 with India at just ~1% share despite 18% of the world population, and IAMAI's count of 950mn+ Indian internet users; MD Vikram Mehra closed by citing the board's mandate to "future proof Saregama," caring about performance "20 years" down the line.