Saregama India (SAREGAMA)

FairStock Score: 78/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Zero debt (D/E 0.00) gives solid downside protection.
• Positive free cash flow of ₹111 Cr and Altman Z-Score of 3.49 suggest low financial distress.
• ROCE of 17.20% and ROE of 12.11% show decent capital efficiency.
• Promoter holding of 60.39% aligns management with minority shareholders.
• Dividend yield of 1.35% provides modest cash return while waiting.

Concerns

• Sales growth of -21.41% and profit growth of -3.09% indicate stagnation.
• P/E of 33.21 and P/B of 4.24 are rich for a business with negative growth.
• Graham Number of ₹135.59 and DCF value of ₹29.27 are far below the price of ₹348.40, leaving no margin of safety.
• FCF yield is only about 1.7% at ₹6,421 Cr market cap, and EV/EBITDA of -128.65 needs careful scrutiny.

AI Analysis

Let me examine Saregama as an owner, not a trader. The first thing that pleases me is the fortress-like balance sheet: debt-to-equity is 0.00, free cash flow is ₹111 Cr, and the Altman Z-Score of 3.49 signals low financial distress. ROE of 12.11% and ROCE of 17.20% are respectable, and promoter holding of 60.39% means my interests are aligned with people who eat their own cooking. Now comes the harder part: price. At ₹348.40, the market cap is ₹6,421 Cr. The P/E is 33.21 and P/B is 4.24, while book value is just ₹82.12. Even near the lower end of the 52-week range of ₹307.05-₹574.50, this is not a cheap stock. A high multiple demands growth, and I see the opposite: sales are down 21.41% and profit is down 3.09%. The latest quarter's ₹260 Cr revenue and ₹51 Cr net profit tell me the business is still operating, but the engine is not accelerating. Free cash flow of ₹111 Cr gives a yield of less than 1.8%, and the dividend yield of 1.35% is hardly compensation. Graham would look at his Number of ₹135.59 and the DCF value of ₹29.27, and conclude there is no margin of safety; in fact, the stated margin is -145.59%. The EV/EBITDA of -128.65 is too odd to be useful; I would rather focus on cash flows. I will not call this a bad company. The Piotroski score of 6/9 and zero debt show financial discipline, and the FairStock score of 53/100 says mixed. But a slow-growing or no-growing business with these numbers is not worth ₹348.40 today. To use Buffett's words, buy a wonderful business at a fair price only if the price is fair. Here, the price is not fair. I will wait for either a clearer growth trajectory or a materially lower price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer