Indian music companies performed indifferently over the past 52 weeks. The lone exception was Music Broadcast Pvt. Ltd. which announced last week that it was acquiring a rival radio station.
How has been the performance of the top Indian music companies? We look at the performance of pure-play music companies like Shemaroo as well as private FM broadcasters which rely on music to draw audiences.
1. Music Broadcast Pvt. Ltd
This is the oldest private radio network in India and at the time of writing this article operates 39 stations.
As on June 4, 2019, the share price of MBPL stood at Rs. 58 (BSE) and Rs. 58.20 (NSE). The 52-week high of this stock was Rs. 68.40 and it’s low was Rs. 50.00. The percentage change in its stock price was 0.85%, and its total market cap stands at Rs. 1645 crores, one of the highest in the private FM business.
MBPL is an asset-light radio station and its stock price has corrected 15% since January 2019. Its future performance will depend a lot on the performance of Big FM, which MBPL plans to acquire.
2. HT Media Ltd.
The performance of HT Media Ltd., owner of Fever FM has been lacklustre over the past 52 weeks.
As on June 4, 2019, the stock price of the company stood at Rs. 31.75 (-Rs. 2.50) according to BSE. The NSE stock price was at Rs. 31.95 (down Rs. 0.95). Share volume stood at 15270 (BSE) and 125679 (NSE). The market cap stood at Rs. 738 crores.
In the last quarter of 2018-2019, the company’s total revenues fell to 621 crores from 644 crores in the corresponding period last fiscal. This loss is attributed to sluggish ad revenues from big advertisers.
Now, let’s have at the performance of some of the traditional music companies like Eros and Saregama India. These are pure play music companies and their revenues come from music rights and royalties.
3. Saregama India
The 52-week high of Saregama was Rs. 779.60 while the lowest figure was Rs. 460. Percentage change in stock price was 1.23% at the time of writing this article. The total market cap for this music company is Rs. 950 crores.
As on June 4, 2019, the stock price is Rs. 551 (BSE) and Rs. 553.45 (NSE). More number of shares are transacted on NSE ( 18655) in comparison to the BSE (515).
There has been some concern in some quarters about the compensation of the CEO of Saregama India. Some market watchers feel that the CEO is being compensated disproportionately to the company’s annual turnover (Rs. 43 lac / Rs. 950 crores). But if we look at the company’s financials closely, we find that the EPS of this company has grown by 53% over the past 3 years, shareholder return is up by 111% in the same period and turnover has gone up by 63% over 2017-2018. Definitely, CEO Vikram Mehra has been exceeding stakeholder expectations over the past 3 years.
4. Shemaroo Entertainment
Currently, the stock price of this pure play music company is Rs. 367 (BSE), and Rs. 365.50 (NSE). On June 4, 2019, the stock price changed +1.82 % on BSE and +0.29 % on NSE.
Like Saregama India, Shemaroo too has been buffeted by extreme price movements in the last 52 weeks. The stock price rose all-time high to Rs. 530 and plummeted to Rs. 320 in the last 52 weeks. Currently, the total market cap for this company is Rs. 997 crores.
So what makes Shemaroo tick?
Superb debt management practices over the years have made this music company cash rich. The company’s revenue has gone up 50% in 2019 over 2016 and is expected to double in 2021. Similarly, the EPS or Earning Per Share is constantly rising from 2016 and is expected to double in 2021. Click this link to know more about this music company.
5. Eros International
Like Shemaroo, Eros has also seen extreme fluctuations in its stock price.
In the last 52 weeks, the stock price of Eros reached an all-time high of Rs. 139 and went to a low of Rs. 57.80. The total market cap currently is Rs. 633 crores.
As on June 4, 2019, the BSE stock price of Eros is Rs. 66.35 (-0.08%) and 66.40 (-0.15%). The Earning Per Share (EPS ) stands at Rs. 28 as on June 4, 2019. Operating profit has slid down from Rs. 79 crores in March 2018 to 43 crores in March 2019.
To conclude, private FM companies such as Music Broadcast are performing much better than pure play music companies. This has got to do with the revenue spread of the former. Music companies are more or less dependent on music royalties of the films whose rights they have purchased.