Saregama India Limited (SAREGAMA) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Saragama India Limited Q2 F527 earnings call hosted by 361 Capital Market Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded. I now hand this conference over to Kavish Parekh from 361 Capital Market. Thank you, and over to you, sir.

Good afternoon, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Vikram Mehra, Managing Director, Mr. Abhishek Kapoor, CFO, and Mr. Pankaj Kedia, Executive Director, Investor Relations. I shall now hand over the call to the management for the opening remarks. Over to you.

And a very good afternoon to everyone. This quarter saw our revenue from operations Our quarterly numbers look very healthy. I would, on behalf of the entire management, once again reiterate that please evaluate our performance only on a rolling 12-month basis or a rolling 12-month basis. Music, the first vertical of ours. Global recorded music grew to US$ 31.7 billion in in 2025, according to IFPI. And India has just 1% share of that. In spite of housing, over 18% of the world population. We in India are operating in the most underpenetrated large music market on earth and our entire strategy at Saharigama is built around this next 20 year opportunity. On a quarterly basis, the overall music vertical, comprising licensing, artist management, and retail, recorded revenue of $2,513 million, registering at 35% year-on-year growth. Quarterly EBITDA stood at $1,540 million, with 37% year-on-year growth, and quarterly net margin at $1,165 million, with 46% year-on-year growth. Music Vertical had a low base in the first half of financial year 26, which has helped us with such a strong growth number in this financial year. On a medium-thumb basis, we maintain our guidance of 20 to 23% CAGR for the music vertical revenue. We have stated in financial year 24 that it would take us two to three years before the growth in EBITDA and profits begins to follow the revenue growth trajectory. We are entering that cycle now where content that was bought two, three or four years ago is starting to contribute positive margins. The first half of this year had greater focus on non-film music, like the iPopstar albums in Hindi and Tamil, which drew multiple songs that trended on YouTube and Instagram, very strong performing Haryanvi and Bihari songs, Punjabi superstar Nidjiya's album. Our biggest film hit this quarter was the Telugu album Paradise. Its song Yesha Nagulla hit global number one position on YouTube on their daily music video charts during this quarter. The second half of the year will focus more on the movie albums, prominent ones being Tanjali La Bansali's Love and War, Shiva Kartikein's Sion, Dharma's Kartikarian star and Nagzilla, and a Tiger Shroff movie. Which is being produced by Sanjali Ravanchali. Our spend on new content this year will be between 300 to 350 crore. As shared earlier, we will now be going forward, we will now be increasing our content budgets at a nominal level of, say, 10% per annum. So, assuming financial year 27 spends of, say, the midpoint of 325 crore, we are now looking at our financial year 2830. To 30, those three financial years, new content spends of around 1,200 crore. Another data point worth sharing. In financial year 26, 60% of all music revenue of Saregama came from music which was released post-2000. So while we at Saregama proudly steward the musical heritage of India, we are now a new-edge IP company with a large part of our revenue coming from brand-new IP. We continue with the guidance of the five-year payback period for all new music bought. Followed by 55 to 75 years of returns coming from that music. Music catalogue is increasingly treated globally as an infrastructure-light inflation-linked asset class, which is why institutional capital is now flowing into this space, either through JV or direct catalogue purchases. Our 180,000-plus song catalogue. Growing at 4,500 to 5,000 new releases every year is exactly the kind of asset that compounds value over decades. Let's spend a moment on subscription. The push from digital platforms like Spotify, YouTube, JioSawun to build paid subscription revenue continual with labels working proactively alongside them to accelerate this process. We have already started seeing results coming. All these initiatives are being taken. A recent Indian consumer study done by E&Y and IMI stated that 64% of free music customers are ready to shift to a reasonably priced paid service if the free service stops. As a company, we continue with our bullish position on subscription growth in the country. Globally, the music industry is now growing both on both subscribers, paid subscribers. See Universal and Spotify's latest quarter results. Even after so many years, subscription revenue is still growing steadily for both Spotify, which is a platform, and Universal that's a label. In India, the growth is still coming entirely from the new subscriber. So it's just only one trigger that we have for growth, which is addition to new subscribers. Pricing is the second growth engine that is still ahead of us which will start kicking in hopefully two to three years from now onwards. Let's talk about AI. Saragama's position on AI remains that it will be beneficial to the company in the long run, both in terms of cost reduction and speed to market. But while we support licensed innovation, we at Saragama will constantly fight against unlicensed exploitation. All our new digital licensing agreements are building protection against dilution of rights and potential fraud. As of now, data and consumer research seems to be indicating that AI-created music is winning primarily on volume and not on consumer listening. Whatever little that has popped globally are AI versions of existing hits. For a catalogue owner, the bigger near-term issue is probably unlicensed AI covers and remakes of our songs and not AI songs competing with the new releases. We have invested in technology that is able to track these cover versions on various streaming platforms and we either buy them out or pull them down. We are also opening dialogue proactively with AI creators so that we on our own can own and distribute the AI versions of our bigger songs. Global industry is converging on the stance that we have held. Universal has called for an AI-generated filler to be paid less than the human artistry, and Spotify is building licensed, remixed, and cover features with right-holder's consent, credit, and compensation. This is exactly the model we are pushing for AI versions of our catalog – licensed, credited, and paid. As shared earlier, we have created two AI-dedicated teams in Sarigama to optimize cost and speed. One is a content team that's using Gen AI tools to create neighboring audio content like podcasts, using Sarigama songs and building new age music videos around the older songs. We will be releasing around 100 hours of podcast content in Q3 using these tools. The second team is looking at every process within the company with the end objective of optimizing these processes using AI tools. This has already resulted in marginal savings and manpower cost. We will be in a position to see the full impact of these initiatives over the next few quarters. While global music majors are now talking about expanding artist brands beyond streaming, we have been quietly building this over years and is already a meaningful EBITDA contributor through our artist management, live events, and brand partnership verticals. The artist management vertical of music works by making artists popular through our IP releases and then monetizing them via booking for live events, wedding, and brand endorsements, from With Saragama, Anusha, Share. At the end of this quarter, we represent 340 artists with more than 450 million forward base on Instagram and YouTube combined. As our investment in new content grows, these artists are also going to become bigger. And with digital advertising growing at over 14% per annum, if I go by the latest E&Y report, we believe that the artist and the influential economy is going to be the biggest beneficiary of this growth in digital advertising, which means We get our share from that revenue, straight away contributing to our bottom line. Let me talk about live events now. Financial Year 27 started with us expanding our live vertical into multiple formats, helping us diversify our risk. We extended the Karwa brand into smaller concerts under the Karwa live banner, targeting middle-aged and older audiences that enjoy sit-down premium music listening experiences. 54 such shows were produced in Q2, serving around 10,000 audience. The other big highlight of this quarter was our Ilya Raja's U.S. tour across 11 cities serving 20,000 audiences. We further built our devotional format with 17 shows featuring Manoj Muntash's Krishna, Backstage siblings, and Jayakishwari. The labels are increasingly focused on monetizing superfans. Luminate research shows superfans spend over 100% more than an average listener and 73% of them buy physical merchandise. Karma Live and her diaspora tours target exactly this segment in the Indian context. Older, financially comfortable, willing to pay a premium for curated experience with the artists they grew up listening to. Our long-term belief in the potential live events keeps getting reinforced every quarter and we will continue increasing our investment here. The focus will be over time to lean more and more towards IPs that we people own and reduce our dependence on artist-based concerts. I think I've been sharing with you guys over the last couple of quarters, we have put in place a new vertical around brand partnerships, building an additional high margin revenue stream along with our licensing business by maximizing revenue that we get from brands across music, live events, and short format videos. This quarter, we did over 20 brand deals with partners like Apple, Airbnb, Google, Cadbury, Tanishka, etc. The video vertical. Revenue of this vertical declined 16% to $183 million. This follows a conscious decision to wind down a film business and invest in Banshali Productions instead. And revenue in this vertical may decline further in the coming quarters as this transition plays out. But we will continue investing on video content which is Gen Z focused, that means short format content that is talking to Gen Z and also at TV and web shows. The good part about the formats that we will have invested in that most of them are low ticket items and secondly, we have an advertiser or a platform that comes on board before any video is shot. Regarding our two investments, Pocket A's has reached break-even in financial year 26 and is moving towards profitability this year. Bansali Production has all geared up for their biggest release, Love and War, in quarter four, and is actively working on the slate for financial year 28. Over the next few years, we will continue investing in new music content. This will contribute not only to the immediate growth, but also set the company on a long-term growth path. We maintain our guidance of 20-23% revenue CAGR and 60-65% EBITDA margin for music vertical over short to medium run. Tarikama's growth narrative will remain steady over medium to long term, driven by rising digital consumption, both new customers entering the market and existing customers consuming more. With over 950 million internet users in India, this is the latest IAMAI report, our cash reserves, professional managerial debt, a board that thinks long term and is ready to back the management, and access to the soundtracks of the best films. We can drive earnings not just for next 2-3 years but for the next 20. On Spotify's latest earnings calls in October, their co-CEO Alex Nordstrom pointed to India's 1.4 billion people and 7-8% GDP growth over many years and he said that he sees no better Better market for Spotify to grow its business than India. Spotify is backing this by making changes to its free tier in a market like India by increasing the ad load adjustments in order to drive conversion to paid. They are even looking at windowing of content where newer content goes first to the paid side and at the later stage only comes to the free people. When platforms like Spotify grow in India, owners of premium Indian music IP will grow with them and Saragama is the best place company amongst them. And it isn't just music platforms. In its latest quarter, Netflix reported, India's viewers are up 24% and revenue is up nearly 20%, driven by strong local content. Indian consumers are increasingly paying for premium local entertainment and is the local IP that wins. To summarize. We operate in the world's most under-penetrated large music market with a high-margin structure and own IP catalog growing at 4,500 to 5,000 releases a year, an unmatched in-house entertainment flywheel and a strong balance sheet. Every global trend, subscription growth, ARC expansion, superfan monetization, and anything beyond streaming diversification has a long runway in India than anywhere else. Sarigama may be the cleanest listed way to own this thesis. Thank you and we will be open to questions now.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Govindarajan, from CSIM. Please go ahead.

Yeah, hi. Hi. Good afternoon. I have two questions. Hi. Two questions. First one is on the event side. I know it's a small number, but we have had reasonable revenues this quarter, but it's still, you know, the profitability. Obviously, you've made a loss during the quarter, so I just wanted to understand that. And second, this is a question that I think we discussed in the previous calls as well. Could you explain why the unallocable expenditure is going up again? It's 27 crores this year versus 18 crores last year. What contributed to this increase? Thank you.

Okay, let me answer the first one. Events, we are at the stage, as I mentioned in my opening statement, where we are moving consciously are dependent from artist-based concerts. IP-based stuff. In an IP-based stuff, for example, we have Unforti, which is a music festival of ours. There is HaHaKar, which is a stand-up comedy festival of ours. There's Krishna, which is a devotional concert IP of ours. Karma Live, again an IP of ours. As you, in all the IT-based concepts, in the initial run, there will be higher investments that are going in. We are not capitalizing any of that. Majority of that is all getting charged off. So you are seeing that kind of a... Number impact here. The moment we go only and only in artist-based concerts, the profitability will look a little better, but in the long run, we have no control on our destiny. So, this is a part of a conscious game plan that is getting unveiled in the market. On another cable, Abhishek, will you take that?

Yes, Vikram, I'll take that. So, if you notice from our segment results, the unallocable cost is netted off out of the unallocated, the other income. So, other income, if you see, it's a decline of 55% year over year. That's the only reason because of which you see that there is a bump up in the unallocated cost. If you back that off, otherwise, apart from the other income impact, it's flat versus last year.

And versus the first quarter, there's a 6 crore increase versus the first quarter.

Yeah, so it's the same thing. It's basically the prime reason for that is only the other income which is netted off from this line item.

No, first quarter to second quarter, other income is actually grown.

Listen, on a quarter basis, typically, there are some of these legal things that come in. Please evaluate everything. You have been following us for a long time now. Asking us questions on a 12-month basis, if you see changes happening, please ask us questions. On a quarter-on-quarter basis, these things keep on moving.

Okay. Okay. Just to point out, not to belabor the point, even on a rolling basis, there has been significant increase in unallocable costs in the last four years.

Remove the other income part out of it. We were making a decent amount of revenue from the interest income of the QIP money that was sitting with us. All of that now has been invested earlier in pocket cases, some of the Haryanvi catalog that we ended up buying, and our position in Banswali. So, you have other income coming down, but the investment has been made at great places over time. Hopefully, that is going to more than compensate for the loss in the interest.

Fair enough. And last question, if TikTok were to come back, what do you think would be the impact on the industry, both in terms of revenue opportunities as well as the…

Positive. Very positive. One, I believe the market is going to go back and become far bigger than what it is today. That's what we are seeing in every other part of the world. Second, the payment structures of TikTok are better than the... What structure are they going to come back to India with? I have nobody to comment on that. But going by some of the trends we have seen in other parts of the world, their payment structures are better, more suited towards IP owners. So I think it will be great news if TikTok comes in.

Thank you.

Thank you very much. Next question is from the line of Akshay colleagues from Dalal and Rocha. Please go ahead.

Hello. Hello, Akshay.

Yes, sir.

Congratulations on good setup number. So, a couple of questions from myself. So, my first question is, you have guided around 20 to 23% growth in music, artist management, and retail. But in H1, Vertical has been grown around 37%. So even though our key albums like Love and War and Bansalvi titles are due in a Q4. So this release is still to come. So should we expect 5.27 growth will be well above the guidance? Since we see overall growth in the music industry, I just want to understand why we are more conservative while guidance.

Akshay, let me answer this. It's a very fair question. Our guidances are always given on a 3-5 year basis. We don't give guidance on a per year basis. 3 to 5 figures per Things move here and there. So on a three to five year basis, we are expecting music vertical to grow at a CAGR of 20 to 23%. You may have an year where the numbers come down a bit. You may have an year where the numbers go up a bit. On a steady basis, you are looking at 20 to 23% CAGR.

You understand. Okay, so my second question on music segment basically, so I see that your music margin has been up 700 bips year on year, like from 48.4% to 55.4% EBIT margin. Is the operating leverage from new content or partly your content timing or directionally it's a period growing faster than ad base? It's like growth is coming from like, from where is it growth is coming? Is it from rate or volume?

Fair enough.

Who wanted to understand?

Sure. I think I addressed it in my opening statement. Let me again explain. We have stated this in financial year 24 itself as we started investing heavily in newer content that in the initial year when you invest in a content, the bump in the revenue was just getting equal to the charge-off that we were taking of the content cost. As some of those content pieces, investments that we did in a financial year 24 or a 25 or a 26 has now reached a stage whereby the revenue increase on account of that is far higher than the cost charge that we are taking. This is part of what we had said three years ago that will happen, and slowly you are seeing that getting... Have I answered this then?

Yeah, so, like, and how the growth in a paid-based subscription compared to ad-based?

It's the paid-based subscription which is growing much, much faster than the ad-based stuff. And as you know, on a yield basis, so when a song is heard by a paid customer versus the same song is heard by a free customer, there's a much higher jump in the yield right now from a paid customer. So, as we are seeing, movement is happening. The fact that the world's biggest streaming platform, Spotify, is calling India as their biggest growth opportunity. Streaming business typically works only on subscription and not in advertising. There are moves being made by world's biggest... Music Label, Universal Music, which has agreed to a windowing concept in India, where some of their new content is going to go first behind a paid wall. All these initiatives are, we'll send a clear message to the market here is that there is a serious action happening both between platforms and labels now to start growing the subscription business.

So, my last question is on event business. So, your event has been 45 crore in Q2, and in H1, it is 61 crore. It is already close to FY26 of 62 crore. And the Q3 and Q4, usually the main live season for this segment. So, can you walk through the H2 pipeline? Like, is there a Diljit India tour confirmed in Q3 or any plans?

See, the only part I can tell you for sure is we are not doing Diljeet. We have very high respect for Diljeet Dosanj. I think he's the greatest performer this country has ever seen. The financials are not working out. So for this season in India, we are not working with him. But there is a Guru Randhava show that's coming up. There's an Unforti coming up. There's AHA car that's coming up. There's another... Bigger than mid, I won't say a top artist. His tour is yet to be announced, but that's also coming up. So there is a decent pipeline that we have. What we had in the first half of the year was a very successful Ilya Raja tour in US, which gave us a fillip on the artist side, artist concert side. So, yes, we have a full calendar sitting in front of us, and we'll keep on doing this balancing act within the live event, whereby we will definitely do artist-based concerts, their paperwork, but we will focus on IP a little more, because in the long run, that's what's going to give us the pricing power.

Okay. Okay. Yeah, that's it. Thank you.

Thank you very much. The next question is from the line of Naveen Botra from Shubhla Research. Please go ahead.

Yeah. Naveen Botra from Shubhla Research, Delhi. First of all, I would like to congratulate Vikram Naragi for excellent performance continuing for the last two, three quarters. And my first question is regarding our Karwa app. I want your observation on the performance of our Karma app. I would like to express that my view that the app is really engaging and intuitive. Along with music, some good features are also there. So if you can throw some light on the operational metrics of our Karma app, like number of paid subscribers, and what are our long-term plans with this app for upskilling new engagement sets.

First, thank you. And you congratulated me, but the real congratulations goes to the board and the team. It's their background because of which we are able to show these numbers. Your question on Karma app, see, Karma app for us is still in the test phase. We have put some of our content out, we're experimenting with some of the other things to see can we build a reasonably strong proposition for middle to older age people who in the earlier days have bought our hardware Karma. We have still not gone out and pushing it in the market. I think we will take this financial year to run all kinds of experiments with it, to understand what kind of content works and what doesn't work. We have no juncture want to get into anything. We have no intention to make it a hardcore music streaming app. There are much better people sitting than us. We want to build a community around older people, and Karma is a big draw there. It's an attempt in that particular direction. Give us another four to six months. I think once the experimentation phase is over and we start pushing the app, at that time I'll be able to share more details with you.

Okay, sir. That is quite helpful. And, sir, the second question is connected to this one also. We have made a Carva Club. Carva Club, which we also have an impression of. What is the plan of this as an engagement plan?

Sir, Carva, sir, all these are. The Karwa Club is again another way in which community of older people who bought Karwa at one time can be connected. So Karwa Club people can go out there and meet each other on the Karwa app or they can go for a Karwa live event. So, if you see there's a Karwa hardware, there are Karwa live events where Kishore Kumar or a Muhammad Rafi or Amita Bachchan songs are being played live and we are engaging people. I'll really earnestly request you Bombay, Delhi, Bangalore is where we do these events. Please go and visit one of these events. And then this Karwa app and all these three things we are trying to combine under Karwa Club. I'm very happy that you are aware of this. Give us time. It's still all in the testing phase.

Karma hardware, I can say you that 150 to 200 karma hardware, radius from mini to... The biggest karaoke, I have purchased myself and my friends, relatives and all these things. Very great. I am a karma fan. Yes, yes. Thank you, sir. So, these few questions, I just wanted to have your... Medium-term thinking about the monetization and engagement, that is what's coming from your side, sir.

Let the testing phase and all the customer experimentation that we are doing, let that get over. Right now, we are neither spending money on it. We are just testing it with a small group of people who work on our hardware owners to see what the response is, what works, what doesn't work. Give us end of the year, and we will share more details.

Okay, sir. Okay. Thank you, sir. Thank you very much.

Thank you very much. The next question is from the line of Kumarsara from Scientific Investing. Please go ahead.

Thank you. Congratulations on a great set of numbers, sir, again this quarter. My question is around the events. So when we organize these events, I think I have seen on BookMyShow and all in Bangor, you know, the bookings happening. So what is our distribution model and how much we share to these distributors, if you can highlight?

Sir, I can't share the commercials, but what we typically do is list our events.

Thank you, sir. It's a very nominal share, right?

Yes, sir, I agree. You may get more information by looking at district numbers because I think they will have to go back and declare it. But those are nominal numbers, sir. The percentages. Because what they are providing is basically a ticketing platform.

Got it, got it. And, sir, my second question is that, yeah, yeah.

Ji, pata ye.

Yeah, my second question is on the karma. So basically, if you see karma, this is basically for older generation. And actually, if I see, you know, somebody who is 60, 70 years old, earlier, we didn't have this trend of these kind of communities, events, and going listening to music. But the current generation, even the 40 year old generation or the young 20 year generation, for all of them, you know, attending events, concerts, this is a regular activity. So, when you're thinking of all this community, I know it's a very new initiative, but is there somewhere a long-term plan of creating that kind of customer stickiness as he grows from young to mid-age to old, that the lifetime value of the customer can be monetized in a different way, especially given, you know, 10, 15 years down the line, India will keep growing older and older. I just want to understand, is that a long-term objective than, you know, just in the short-term selling more, you know, more karma sites and all?

No, sir. So, you're paying on. Building this community is not going to allow me to sell that many more karma pets. Karma typically gets retail through e-commerce sites. The game plan within the company is this only, as you stated. Can we build a community of middle-aged to older people who connect with each other in this digital world? There's a need to connect with each other that much more, and they connect with each other on the basis of music and entertainment. That's a long-term play that we people have. We happen to be the only music label. Not just in India, globally, which has direct customer relationships. It's the karma part which came out very, very handy for us. So now, we are the only label that has got hardware. We are the only label that is also selling live events. So everybody else has a B2B relationship. We also have a B2C relationship. We are trying to use it in a more judicious fashion. We don't want to blow cash unnecessarily. We want to go slow but build an engaged community. And the advantage of community is exactly what you said. A person comes for event 1, ends up buying maybe my next hardware also coming in, then goes for an event 2, and maybe then also takes my app. So, we are trying to do this for the older people. Right now, the two parts are kept a little separate. Older people are being targeted under karma, while the younger part, what we people are doing, is happening either under filter copy or Saregama brand part. But both sides, we are trying to build engaged community, because that is our USP compared to every other music label in the world.

Great, got it. Wish you all the best, sir, for coming quarters.

Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and one on your touchstone telephone. I repeat, in order to ask a question, please press star and one on your touchstone telephone. The next question is from the line of Harsh from JM Financial PMS. Please go ahead.

Yeah. Hi. Thanks for the opportunity. A few questions from my side. Just firstly on artist management, if you could help us understand what exactly does this include? Is there some bit of portion of pocket aces which also gets clubbed into this?

Yes, sir. Both Pocket Asses and Sarigama, we have similar vertical of talent management. Within Sarigama, there's a much larger focus on music. At Pocket Asses, there is a lot of focus on music, entertainment also. So both the people get combined here. So what we always do is take some of the entertainment-based talent of Pocket Aces and feature them in the music videos that we are creating within Saragama. So in that sense, they all interlink to each other.

Sure. So, any split between what is getting contributed by pocket aces within artist management?

No, sir. Just take it. This is a combined number that we are talking about.

Sure. Okay. And how should one, say, think about the growth in the next four, five years within this vertical? Why I ask this question is because if I look at the first half of F27, that's almost the growth is kind of 100%. So, on a sustainable basis, say, let's assume that currently what we are doing, more or less we should be doing around 200-odd crores, say, in F27, then is it safe to assume that at least maybe, say, 25-30% growth can continue, say, over the next 4-5 years within artist management only?

We have never given individual vertical bias growth projection. It becomes very difficult for us to handle it. Our overall music is the only guidance that we people give, which comprises licensing, retail and artist management, and as I stated earlier, we are looking at, on a short to medium-term basis, 20 to 23% CHER.

Sure, no worries. And just lastly, anything on the monetization of shorts, say maybe Instagram Reels or YouTube shorts, any maybe further update on it?

I mean, nothing has changed on the commercial structures. These are still all fixed videos.

Anything which is about to get, say, maybe renegotiated or anything of that sort?

So, if the moment there is a change of structure, I'll be very happy to share. Rest will be only speculation from our side. I'll resist that.

Sure. No worries. Thank you. That is it from my side.

Thank you very much. The next question is from Linus Fritesh Chhidda from Lucky Investments. Please go ahead.

Just a data clarification question. So when you look at the way you report the music revenue, and there are three data points across the presentation segmentally. In segmentally, your music revenue reported is 200 crores. On slide 10, it is reported 250 crores. And on slide 22, it's reported to 30 crores. So, you know, any reason why we interchangeably report the music and the artists are, you know, combined and somewhere different as music, any, why, and how to interpret this, actually?

So that's why I'm from... Based on the advice of a couple of people, one of them actually asked a question also today. We have taken this conscious call within our presentation. We will combine all the three verticals together and then give you the data. If you look at the presentation, it's very easy for the presentation for you to break how much is licensing, how much is artist and how much is retail. But for us, whenever we're giving any guidance, it will be from the music segment all combined. For various reasons, we are reporting, our results are reported and are broken into two segments. What is put in the results is music licensing and retail comes in one and artist management comes in another. What we as a team always believed in, music licensing and artist management is one piece only. That's why we said to clear all this clutter, we are saying that all three are combined into one thing, which is called music. While we are giving you the breakup of all the three segments in the presentation, but what we call is music comprises of licensing, artist management, retail. Presentation will give you the revenues of each of these three segments separately also.

Okay, so if I take the segmental revenue of 200 crores, which is reported for the quarter, and then if I take from the presentation music retail at 20 crores, 21 crores, then basically the 200 minus 20, 179 crore is basically the licensing revenue, and 21 crore is the retail revenue, right? The retail revenue will be the Karwa revenue?

Yes.

Correct, that's how the interpretation will be. Okay, done. Thank you.

Left to me, I'll combine everything in my results also.

And your guidance, which you mentioned, is then at the Music Plus Artist, which is the 250 crore revenue pool for the quarter and whatever is the annual number. When you say 20 to 25% gross, your guidance is at this two revenue pool of Music Plus Artist.

Yes. So what do you see as 250 at this moment? On a three to five year basis will be growing between 20 to 23%.

Okay, done, sir. Thank you very much, sir. Thank you.

Thank you. The next question is from the line of Ranjit Verma from Sameeksha Capital. Please go ahead.

Yeah, I'm out of here. Hello. Yes. Could you throw some light on the split between digital and non-digital revenue in the music segment? And second question is, I missed the update on the negotiation part with YouTube for shorts monetization and Instagram rails. And the current liabilities have increased over 100 crores. One of the key drivers for the strong reported CFO for H1 could throw some light on the screen.

I'll ask Abhishek to take the question on the current liability. The first two parts, as I've mentioned, the short format apps in the country are still working with all the labels on a fixed fee basis. We want them to move on a share of advertising basis. It hasn't happened yet. The moment it happens, we'll be very happy to go and share that with you. You asked us a question between split between digital and non-digital revenue. Let's understand what is non-digital. Non-digital is a licensing that we issue to, say, a brand, a licensing that we issue to a television channel, public performance, money that we get from a radio. So, the bulk of the revenues are coming from the digital side, I don't know. The only part... It's showing decent growth on the non-digital side. In fact, two parts. One is the brand side and other is the public performance side. The other two sources of revenue which are coming from the more conventional distribution platforms like EV channels and radio stations, they are growing at a much slower pace.

Okay, thank you, but could you give a split, like, quantify any split between?

No, this is all that's competitor-sensitive data. I'll not be able to share those details, but as I said, a large chunk comes from the digital side.

Okay, thank you. Very happy. On current live, Ritjee.

Yeah, sure. I'll take that up, Rajiv. So to answer your question on the current liabilities, see typically in our model, we also receive advances from our customers. So typically that's, you know, different periodicities depending on the deals we get advances. So this is towards the advances which we have received. And that's where you see, you know, a little bit of a bump up in the current liabilities. Against these, the revenues will get approved over a period of time.

Okay, thank you.

Thank you very much. The next question is from the line of Adityanahar from Alpana Intercrisis. Please go ahead.

Hi, Vikram, Pankaj, everyone. Congratulations on a great result and wish you all the very best. I have no questions, Vikram, and just wish you all the very best. Thanks.

Thank you, Adityanahar. Sweet of you. Thank you.

Thank you very much. The next question is from the line of Pooja Doshi, an individual investor. Please go ahead.

Hi, firstly, congratulations and thanks for the opportunity. Jis, I think you gave out a content spend number. You said it's 350 crore for FY27, and you gave out a number for the next two or three years, so could you please repeat it?

So our guidance for the new content spend for the financial year 27 is anything between 300 to 350 crore.

Okay.

What we have said that as we people go beyond 27, our content budgets will now start growing at a nominal pace of, say, 10% every year. So, roughly, I said 300, 350 will be this year. You take a midpoint of 325. You start building on a 10% basis. So, our guidance is that FY28, FY29, FY30 combined new content spends will be around 1,200 crore.

Okay, got that. And just a clarification, would this be including the SLB production content also, or that is the different deal that we had?

That's not a difference. It's part of the same music part. So the way our entire structure with Banshali Productions is, there is an equity structure that we have with them, which is on the company side. But music deal is a complete separate deal that's happening with them. We are giving them the value for every piece of content we'll be taking from them, and all that will become part. Of this kitty. So we are paying them.

Okay, perfect. Understood. Thank you so much and all the best.

Thank you.

Thank you very much. The next question is from the line of Ravi Naredi from Naredi Investment. Please go ahead.

Vikram ji, kaisa ho? Ravi ji, khush hai, aag bar, aap nahi hai. This bar bort khush hai, sir. Mr. Vikram ji, you always give commentary in a smooth way, so our confidence rises this time much more than previous quarters. Sir, where business of film making went? Old movies you sell or something else?

Sorry, sir, I'm not clear about your question.

Business of old movies, which we met in the last so many years.

Many of those movies, IP is all sitting with us. Many of those movies have been licensed out, almost all of them have been licensed out to various platforms. Thank you. Majority of them are 5 years, some are 7 years, others are 12 years.

Right, right. So we are receiving revenue from them, right?

That revenue that we people got, we have been recognized in the year in which the deal was done. We took the entire cost of charge as well as the revenue because everything has come to us.

Okay, okay. Secondly, what is main thing? To gain profit in quarter 2. From where we gain the profit?

Sir, as I said, let's not look at one quarter. Overall, the trend has been what we had been projecting from FY24 and onwards, that as we continue investing in newer content, initially only the revenue was going up, but the charge-off that we were taking on account of that content was just neutralizing the increase in revenue. Hence, the bottom line was not getting touched at all. As we, people, are now reaching year three, year four of some of our content, the charge-off that we are taking is much smaller than the revenue we are getting from that content, which has started politically contributing towards the margin. Right. You will have a quarter... Some quarter numbers going up, some quarter numbers coming down, depending on what were the big releases, when were the marketing costs booked. If you look on a 12-month basis, and this time, if I remember it, in our presentation, based on the recommendation of some of you people, we have done a 12-month rolling also. So that you get the comfort that on a 12-month rolling basis, going for every quarter, 12 months before that, there's a steady improvement that you will see across all the parameters on the music side.

Right, right, right. And sir, last small question, due to AI sounds making by the Gen.G, it impacts in any way to us?

When you say AI, video, AI, music, what are we saying?

AI sounds.

Sir, AI sounds. Video sounds. So, AI is getting used in India primarily to do video and not to do audio as of now, but globally there is a lot of work happening where new music is also getting created using AI. All the data that seems to be indicating, and it's there in public domain, you can check it out, all data seems to be indicating that there is a higher volume. And AI is doing a great job because you can churn out as many number of songs in very little time. So there is a lot of what we call AI slop, which is getting generated, but there is extremely low listenership that any of these AI wave songs are getting. The only place we have seen some, just a little smattering of success, is when AI tools are being used to create a version of an existing big song. We are ensuring that other people are not able to do that to our songs. In fact, we go back and work with some of these creators and say, why don't you do a completely different version of my IP only, and we will pay you some money for it. So, we are very bullish on the advent of AI. I think it's going to help large IP owners like us, but at the same time, we are wary that nobody should be able to infringe our content without taking a license from us.

Okay, okay. All the best, sir. Carry on such momentum in next quarter, thank you.

Thank you very much. As there are no further questions, I would now like to hand the conference over to management for closing comments.

I think we have done a piece. As I said, we people started this journey with a clear mandate coming from our board that we need to future-proof Sarigama. We need to care about today, but we need to be equally concerned about what happens to Sarigama 20 years down the line. I'm happy to say that all the moves that have been made are pushing us in the right direction, where you will not just be proud of the financial performance of the company today, But I think we'll be even prouder of what this company will be 20 years long in the life. Your blessings, I think we will be able to achieve that. Thank you.

Thank you very much. On behalf of Sarigama India Limited and 361 Capital Market, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.