Share of Saregama India Limited has delivered more than 500 per cent returns to its shareholders in the last 12 months. The share stood at Rs 429 on June 22, 2020. It has zoomed to Rs 2714.85 today, translating into gains of 533 per cent during the period. In comparison, Sensex rose 51 per cent in one year.
Rs 5 lakh invested in India's oldest music label share a year ago would have turned into Rs 31.64 lakh today.
The stock has gained 223 per cent since the beginning of this year. It opened 0.9 per cent higher at Rs 2675.00 against the previous close of Rs 2650.45 on BSE.
The share of Saregama India stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
"Saregama has gone up from Rs 181 to now well above Rs 2,700 i.e. up by more than 14 times from its March 2020 lows. The stock looks too overbought technically hence one should either book full profits or trail stop loss well above the cost," Jay Thakkar, VP and Head of Equity Research, Marwadi Shares and Finance Limited, told Business Today.
"The near term support is at Rs 2,400 which if broken then it will confirm its trend reversal from up to down. The daily momentum indicator is already in the sell mode indicating weakness of momentum in the short term," he noted.
"The stock seems to be in the fag end of its wave 3 up and even if it corrects by 23.6% then the stock will fall till Rs 2,146 levels conservatively whereas the 38.2% retracement levels come to Rs 1,781 levels," he added.
The company reported a net profit of Rs 37 crore for the quarter ended March 2021. It had posted a net profit of Rs 14.84 crore in the corresponding quarter of the previous financial year.
Revenue from operations grew 13.6 per cent to Rs 123.45 crore in Q4 compared to Rs 108.6 crore in the year-ago period.
The company informed that it sold 110K units of its revolutionary product Carvaan in Q4 FY21. It added that the fast-growing digitisation of India, buoyed by the present Covid situation, is the key driver of change in content consumption habits.
Speaking on the outlook, the company said, "The Covid19 related hiccups notwithstanding, we expect the music industry to grow by 12 -14%, and Saregama's licensing revenue to grow by 22-25 % annually over the next 3-5 years. The key drivers will be the growing digitisation and cheap data plans by operators and Saregama's investment in New Music.
"In FY22, the focus on transitioning Carvaan from one-time margin Product to recurring revenue-generating Platform will continue," it added.
Recently, the company announced a global music licensing deal with a widely popular short format video platform, Triller.
As part of this deal, Saregama will license its entire catalogue to Triller allowing users to create content using the music library of over 1,30,000 songs.
Saregama India Limited, formerly known as The Gramophone Company of India Ltd is a RP-Sanjiv Goenka Group company. The Group's businesses include power and energy, carbon black manufacturing, retail, IT-enabled services, FMCG, media and entertainment, and agriculture.
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