Saregama India Limited (NSE: SAREGAMA) Q3 2025 Earnings Call dated Feb. 10, 2025
Corporate Participants:
Vikram Mehra — Managing Director
Pankaj Chaturvedi — Chief Financial Officer
Analysts:
Pulkit Chawla — Analyst
Harssh K. Shah — Analyst
Robert James Marshall-Lee — Analyst
Jyoti Singh — Analyst
Ruchita Ghadge — Analyst
Priyankar Sarkar — Analyst
Swapnil Potdukhe — Analyst
Abhishek Kumar — Analyst
Purab Rathi — Analyst
Ravikumar Naredi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’25 Results Conference Call of India Limited hosted by Emkay Global Financial Service. 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 then zero on a touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Pulkit Chawla from Emkay Global Financial Services. Thank you, and over to you, sir.
Pulkit Chawla — Analyst
Thank you and a very good evening, and welcome to the Q3 FY ’25 Earnings conference for India Limited. From the management we have with us today, Mr Vikram Mehra, Managing Director; Mr Panka the CFO; Mr Saket Sa, Group Head, Investor Relations and ESG Reporting; and Mr Pankaj Kedia, Vice-President, Investor Relations.
Without any delay, I’ll now hand over the call to the management for their opening remarks. Over to you, Vikram.
Vikram Mehra — Managing Director
Thank you, and a very good evening to everyone. This quarter saw our operating revenue of INR483 crore and a PBT of INR84 crores. Our revenue has seen a substantial growth and is running at a speed faster than our guidance of 30% revenue increase for the financial year ’25. Our adjusted EBITDA margin on a year-on-year basis. Our disproportionate 58% of this quarter’s revenue has come through events, which as I’ve shared in the past is a lower-margin percentage business. To put it in perspective, INR278 crore revenue came from live events with a INR22 crore profit. This disproportionate share of live events has resulted in adjusted EBITDA falling down to 21%. If for a moment, we exclude events, then our adjusted EBITDA is maintained at a healthy 40%. Although this quarter has been very good, I still request all of you to evaluate us only on a rolling 12-month basis and not on 1/4 performance.
Let me start as always with the music business, which comprises of licensing and artist management. It grew by close to 19% on a year-on-year basis. Our revenues from YouTube maintained their growth trajectory. Audio streaming moved another step closer to the ultimate goal of going fully behind a paid subscription wall. One of the remaining three audio platforms offering free service Airtel Wink decided to shut business during this quarter. This leaves only two players in the market now with free offering. And we are hopeful that they will also turn pay over the next four to five quarters. Because of the shutting down of wink, there will be a short-term pain, but we believe that the closure of their free service is good for the industry in the long-run as it will further motivate the remaining two guys who turn pay.
Our publishing business wherein we give rights of our songs to be used in various videos continues to grow handsomely. Every major web show release in-quarter three, starting from fabulous wise versus Bollywood to Russians or big movie like 2 and Shaij Deva have one thing in common. They have licensed a Saragama song to be used for the show or the film. Brands like Air India, Urban Ladder, also ended-up licensing a song for use in their advertising. Being aware of the power of our catalog, we are constantly fine-tuning our approach in keeping our catalog relevant and top-of-mind, which is done through dedicated marketing teams who work on the placement of these catalog songs at high traction places. We continue with our strategy of future-proofing our company by investing in new content.
The nine months of this year has been the most aggressive content release ever from Saregama. We spent close to INR235 crore in this content and relevant marketing for the content which has been released over the nine months. Many of our albums that we released this financial year are charting at top positions across various languages. On a full-year basis, we will be spending or we will be releasing content this year costing us upwards of INR300 crores. Our August release songs are still on-top of every possible chart. They are still generating daily streams of 10 million, daily 10 million additional streams are generated on YouTube and Spotify combined. If I look at cumulative basis, the four songs of history 2 have generated 1.9 billion views on YouTube and 450 million views on Spotify in just six months. Our Tamil album, Amiran has turned out to be the biggest hit of the Tamil industry of the last of the last calendar year. During Q3 we also ended-up releasing music of other big films like Singham.
Another big move from our side the last quarter was a movement into the extremely popular space of hip-hop music. We tied-up with MTV’s Hustle season 4 to acquire all the 130 songs that were produced under that season. We are also signing the winner of MTV 4 and all the major contestants as an exclusive artist and will be creating more content with them and also monetize these artists through live events. Please remember, hip-hop is one of the fastest-growing categories which is talking to the youth of the country until not limited to any one language they do very well in a Hindi as well a Malayalam or a Punjabi or even Bojpuri.
One thing which we are consistently able to deliver is a better hit ratio compared to everybody else in the market and we attribute this completely to a data-driven approach to music acquisition. Rather than relying on only human ear we rely on predictive models to help us decide what to pick-up and how much money should we be ready to pay for that content. Overall during the quarter we ended-up releasing close to 1,200 original or premium recreations across Hindi, Phoshpuri, Gujarati, Punjabi, Tamil,, Malayala, Marati and Bengali languages. So what I said earlier, I’d like to reiterate it, while we keep on working on the original content, we — there’s a lot of focus and emphasis within the company to keep our catalog relevant, which is by either placing them in the high-profile events or doing recreation of that content to make them relevant for the younger people. Our lineup for the next 12 months is all-in place, wherein we will have music of some of the biggest films of the year. This includes Medoc which got released in the month of January, then Medoc’s next movie called Thama, Barzuka, Dharma, Sanjala Bansali’s love and war, etc.
So as shared with you at the beginning of this financial year, the next three years, which includes ’25, ’26, ’27 will be our period to future-proof our company by investing aggressively in newer content. This is also our endeavor to move from the number two position to the number-one position that we enjoyed in the 20th century. To do this, we will buy big but we will buy smart.
This quarter the charge-off on account of the new content was 29% higher than the same quarter last year. We are in a transitional state currently where our new content expenses are going up in a step-function fashion and resulting in incremental revenues just about matching the content charge-off. Over the period or next four quarters this will stabilize with content investment going up leniently and not in a step traction after that, resulting in additional revenue that will be generated by the content that we’ve invested in the first two years being exceeding the content charge-off that we may be taking right now from the year three onwards. With all this investment in new content, we maintain our guidance of a five-year payback period and then an additional 55 to 75 years of returns coming from this content. Artist Management, the other vertical within music monetization where artists are made popular through our IP releases and then we monetize these artists by booking them for live event weddings and brand endorsements from which Saregama gets a share.
During this quarter, two big artists got added to a roster, Tony Kakkar with an 8 million follower base and Rihan Re with a 6 million follower base. We overall now manage around 200 artists. As our investment in new content goes up, these artists are going to become bigger and bigger. On-top of that, the phenomenon that digital advertising is growing upwards of 15%. We believe that this entire management piece, including the influencer management is going to become a huge beneficiary out of this. You finally are seeing in this country that music-based artists are also becoming a very brand ambassadors. There was a time that the most coveted brand ambassadors used to come only out-of-the film industry or cricket. Now you have with likes of big music-based artists which are getting very, very popular and coveted with the top branch of the country. Net-net, with our stated goal of acquiring 25% to 30% of all new music released in India, the music licensing vertical should double its revenue in the next three to years and this entire content is going to be fund through internal accruals and the QIP money.
Now let me shift to the video vertical where we make films under the brand digital series under the brand-name of DICE Media and short videos under the brand-name of Filter and Nutshell. The explosion in the smartphone ownership and the cheap data are the biggest drivers of this vertical. It’s common to see everybody from a 16-year-old boy or a girl at-home to 40 and 50-year-olds who are waiting maybe at a restaurant or a taxi driver who is waiting for his next rental, if they have two minutes free also, they are constantly glued onto the short format app and are consuming content that we people are putting out. We are still at the very early stages of building this entire video vertical of ours. Over the next five years, we expect it to grow at a 25% CAGR.
As for this quarter is concerned, it was quite a quarter for us as a video is concerned, while our TV serials continued to dominate on Sun TV, there was no movie that was released in this quarter. We had a branded web series called Arranged Patch Up Season 2, which was done in partnership with IQN Peter England which was released by DICE Media and already generated over 25 million views.
We had at the beginning of this quarter one unsold movie lying on our balance sheet. Based on our conservative management position, we have decided to charge it off completely in this quarter. This is a non-cash expense. Future monetization, if any, that comes out of this movie is going to to the bottom-line the game-changer in this quarter was the live eventure business. In partnership with Dosan, we brought the Dil Illuminati Tour to India, which became the most successful tour of any artist ever in India. We had 14 shows in India and I think our biggest show was in Abu Dhabi. We also did in this quarter two shows under Karma Live with Zena Taman and another two sold-out shows with Viraj. As shared earlier, even business is a high revenue, low-margin, but a very-high IRR business. So in-quarter there’s a lot of concerts, it may make our EBITDA margin look low, but the fact is that the capital gets locked for very short durations in this business, thus resulting in high IRRs. Also, it has got a lot of strategic relevance to our overall music business, quarter three actually saw this phenomena playing out.
While India 2 success may not get repeated every quarter or even in a year. What it clearly — the success of the store clearly shows us is the long-term business potential of live events verticals. As the disposable incomes in the country go up, the discretionary spends are going to increase and world over we have seen this phenomenon, the story playing out that when discretionary spends go up, one of the biggest beneficiaries is experiential entertainment. Entertainment whether it’s live events or it’s movies we will we believe in this live events vertical a lot and we will continue to experiment and scale-up in this vertical. We believe this vertical to be one of the verticals of future sure.
Let me move to Karva. The transition of Kharma from retail stores to e-commerce product continues. We have scaled down our product portfolio and also the retail infrastructure that was there in-place. We are fairly confident that while the volumes and the top-line may shrink, the profitability margins will start improving right now as we go quarter-to-quarter. This quarter saw the retail revenue of INR22 crore, which was a 39% drop over the last year.
Overall, if I may say, our long-term strategy or diversifying from just being a music label to an overall entertainment IP company is paying-off. It has not only reduced our overdependence on any one vertical which may have its own swing, but has also allowed us to drive massive cost and revenue synergies between various verticals. Between FY ’25 to ’27, we will be investing over INR1,000 crore in new music content. Of this content of this amount of INR1,000 crore, content was INR500 crores has already been secured. This will contribute not only to the immediate growth of the company, but also put the company on a long-term growth path. We are here not only to drive profitability of today, but more importantly ensure that the profitability as we go-forward keeps on being secured.
We believe that our music vertical comprising of licensing and artist management will grow at 22% to 23% CAGR over medium-term basis. There will be ups and downs, but a medium to long-term projection of 20% to 23% stays overall, at the consolidated company-level, we expect PBT to double over next three to four years. Both music and video verticals are going to contribute to this. We maintain our annual adjusted EBITDA guidance of 32% to 33%, excluding any sudden highs in live events business if it happens. On annual basis, our PBT will show modest growth compared to last year, but this is expected to correct after another four quarters where PBT will also start growing rapidly in sync with the revenue line growth.
Growth narrative will continue to be steady in the medium-to-long term, thanks to the overall increase in the digital consumption, both in terms of new customers coming and joining the digital market and wasting customers consuming that much more. I’m very happy to share that the digital footprint of owned and controlled channels, which were under 300 million as of last quarter has grown-up to 324 million followers across YouTube, Instagram and Facebook. We are on a strong wicket. We are using and relying on data and technology to charter our way and we are thinking long-term. We will continue to focus on businesses which have got a long-term IP value-creation. And while doing this, we will keep an eye on a short-term profitability too. Lastly, I’m pleased to share that the Board has declared an interim dividend of INR4.5 per share.
Thank you, and I’m open to questions now.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press R&1 on the touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles.
The first question is from the line of Harsh Kesha from Dalal. Please go-ahead.
Harssh K. Shah
Yeah. Thanks for the opportunity. A few questions from my side. So firstly, if I dissect the revenue vertical, right? So what I observe is that the pure music licensing revenue, so that is excluding Carvan or the artist Management has grown by just 12% on a year-on-year basis. So considering the views that we have on YouTube and the plays on the OTT platform, doesn’t this growth seem to be a tad lower? So essentially what I’m trying to understand here is, is it a case wherein the catalog music is not growing so much maybe in single-digits or if you could help us understand.
Vikram Mehra
I — your analysis is a little fact is little incorrect because you have for whatever reason have decided to keep artist management out. Remember, what is artist manage, what is music? There is film music, there is non-film music. In non-film music, we end-up going out there investing in artists to put the music out and actually make money by licensing their artists across two live events. So doing the artificial division between licensing and Management is a tad bit unfair. So you should be seeing the numbers on a combined basis only and the numbers are showing right now 18% to 19% growth that we have on the music business of ours.
The other part you asked right now, has the catalog number gone down? No, they have not gone down. Catalog numbers are growing on a steady enough basis every people go-forward. There will be quarterly pressures coming in if suddenly any platform decides like what happened with Airtel wing to shut shop. So those are very short-term impact that starts affecting us. In medium-to-long run, we all understand that shutting of one free platform results into either the free customer joining other platforms — becoming other platform free customer and the revenue goes up there because all our minimum guarantee deals or many of them will start moving towards a paid side.
Harssh K. Shah
Okay. So if you could kind of call-out approximately what rate is the catalog music growing at? I will not be able to comment on that. We don’t give that much amount of details about — because the big question also after that, you got to ask me how do you define catalog music. Different people define catalog music in a different fashion, some define as 15 months, some define as five years, some define as the way we used to define it one-time right now before 2000. So overall, what I can give you a comfort here is that this kind of a growth that we people are showing cannot come unless both catalog music as well as newer music are growing, because remember, we have a large-enough base of our music licensing revenue. So — and a large chunk of that, if you go by my last year numbers, over 50% of that are still belonging to 20th century. So unless grow, we will not be able to show growth here. Got it. Any number you would like to quantify as to what would be the impact of the closure of the Wing Cap.
Vikram Mehra
Not individual platforms. No, please can’t comment on that. Okay. Secondly on the video segment, right, so if I look at the absolute EBIT for the nine months of FY ’25, it’s still negative. So I understand that this quarter there was a bit of write-off that you have done on a conservative basis. But how should one look at the profitability of this division. If you could give a ballpark range of the margin one should expect on an annual basis, not a quarterly basis. So, the video business should be able to give you high single-digits margin percentages. Again, the great thing about the video business is that if you play it properly, the IRRs are far higher because you don’t end-up investing lot of your own money in the movie and you’re able to turn-around that cash multiple times during the year. That’s how we look at the video business. There are ups and downs that keep on happening. It’s still a relatively newer business for us. We took over pocket Aces just a year back and we are still stabilizing that part of the business. So you will see as we people go-ahead, our video business also generating single-digit margin percentages.
Harssh K. Shah
So single-digit EBITDA or EBIT?
Vikram Mehra
I will say single-digit EBITDA.
Harssh K. Shah
Okay.
Vikram Mehra
But this right now in the film business, we charge-off the entire cost of the video in the first year itself. There’s nothing which is sitting out there in the balance sheet.
Harssh K. Shah
Correct. Got it. And lastly, one clarification. So the show that we are doing in collaboration with Viraj Girani, who is one of our artists, so the revenue is booked within the live events vertical or within artist Management?
Vikram Mehra
Live events vertical?
Harssh K. Shah
Live events. Okay. Got it. That’s it from my side. I’ll be back-in the queue.
Vikram Mehra
Thank you.
Operator
Thank you. Next question is from the line of Robert from Kusana Capital LLP. Please go-ahead.
Robert James Marshall-Lee
Hello, can you hear me okay?
Vikram Mehra
Yes. We can.
Robert James Marshall-Lee
If you could just be interested in when you’re talking about the aggressive ’25, ’26, ’27 investment, just how you’re thinking in terms of return on capital on that? And if you could just explain a little bit the kind of the sequencing of the P&L, how that comes through? I’m fully supportive of kind of investing for growth, but I just wanted to understand how the impact of that and how you see in terms of value generation.
Vikram Mehra
So the only guidance we will have on the newer Music investment is that we people adhere to a five-year payback guideline. On a cumulative basis of all the content that we procure in FL financial year. And we are doing over the last four years of new content investment, we are faring better than a five-year payback period. Does that answer your question?
Robert James Marshall-Lee
When you say a five-year payback, could you just clarify how you’re calculating that?
Vikram Mehra
So the entire money that we people are spending on the new DAB, on the content acquisition and the marketing cost that is incurred on the content. So typically our ratios are 80 bucks on content and 20 bucks on marketing. So if I spend 100 bucks without loading the cost — time period cost of money, we will be recovering these 100 bucks over the next five years.
Robert James Marshall-Lee
Okay. And so given the aggression of your investment at the moment, you’re effectively your write-offs through the P&L are just exceeding the kind of the marginal gains on the kind of the P&L benefit side in during that kind of period, but then they’ll — they’re expected to inflect back the other direction, is that correct?
Vikram Mehra
Sorry, I’m not I did not get you.
Robert James Marshall-Lee
So when you’re — as you’re accelerating your — your investments as you’re going through the accelerated investment phase, then the P&L kind of dilutive effect of the upfront write-off exceeds the benefit temporarily. Is that correct?
Vikram Mehra
So, yes. So we people typically charge-off 38% of the new content investment in the first year itself because it’s a — it’s not a linear increase in our content investment. It’s a step-function jump we are doing in the content investment side. That’s why two quarters back we had given the guidance that for the next six to seven quarters, we will see a situation where increase in revenue on account of the newer content will just about match the charge-off that three people are taking. As we jump across that after four quarters from — after which that growth in the content investment is going to start falling more on linear nature, that’s a time that the revenue growth is going to become faster than the charge-off and hence profitability will start coming in on account of the new account.
Robert James Marshall-Lee
Yeah, understood. And could I just ask about the kind of the impact you’re expecting from the exits of free platforms? So you talked about the two which have already shut up shop. Does that impact you kind of temporarily in terms of any kind of monetization you’re putting through those platforms? And how do you see that shaking out there?
Vikram Mehra
So over the last 18 months or so, four of the platforms have either shut shop or have gone completely behind the paid wall. Ghana and Hungama have gone fully behind the paid wall while and Airtel wink have shut shop. The immediate impact of that is that the minimum guarantees that we were getting from these platforms are overnight gone away. As you can see the in looking at the four out of eight platforms in India have shut shop, the impact should have been massive on our bottom-lines, but we have been able to cover ourselves because many of the customers who were there on these free platforms have either transitioned to other free platforms or have moved towards a paid service. So we believe this journey will continue and of the remaining two platforms, there will be one of them, which is an Indian platform. I think if they go out there and turn pay the international platform is going to follow-through suit. And over the next four quarters or five quarters you will have India transitioning from a free model to a paid model on the audio side also. You’re already seeing trends on — in the past on the cable and satellite TV world where transition happened from free-to paid. We have also seen on video and demand part where numbers have gone up substantially. We believe something similar is going to be happening on the audio side too.
Robert James Marshall-Lee
That’s really helpful. Thanks very much.
Vikram Mehra
Thank you.
Operator
Thank you. The next question is from the line of Yoti Singh from Arihant Capital Markets Limited. Please go-ahead.
Jyoti Singh
Thank you for the opportunity.
Operator
Sorry to interrupt my sir. Your voice is very low. Please use your handset.
Jyoti Singh
Yeah, I’m using my handset already. So thank you for the opportunity. My question is on the event side business. Like we have done very good in this quarter. So what our expectation going-forward, we are expecting similar kind of performance and also how much margin we are expecting going-forward or if we are seeing similar kind of trend, so it will going to impact on the margins?
Vikram Mehra
Yeah. So, Judi, what we — a year, year and a half back when we started the events business, we started it because we were seeing some initial amount of interest from the Indian customer in music and that’s why we were bullish on that. Secondly, we saw a serious synergy between the live events business and our licensing business. We were not very sure which way this events business is going to pan-out. What our performance of quarter three has shown us that Indian customer is getting more-and-more open to the idea of experiencing live music. It’s not just our consoles that have done well. There are some of the international artists who also performed around the same time and have been able to draw large amount of crowds. So we believe that as we people go-forward over three to five years, there may be a large amount of growth coming out-of-the events vertical itself in the company. Compared to everybody else, we have an edge at this moment. Firstly, we are the only music label in this country that also has a live events vertical, which allows us to get a massive edge. We have relationships already going on with the artists. We are also releasing songs of the same artists right now who live events people are doing. Nobody else has got the same position in the market.
You may not see this performance that you saw in-quarter three getting repeated every quarter. But as I — let me repeat myself, over a period of next three to five years, directionally, we’ll move-in here and the margins in business are at best high-single-digits but because your money gets locked for very short-duration at time 30, 60 or 90 days only, never more than that, you are able to go back and generate very-high IRRs.
Jyoti Singh
Okay. Thank you so much, sir. And sir, on the margin side, basically margin is the main concern with Saregama compared to our competitor. So when we are going to see the stable or good margin?
Vikram Mehra
Ma’am, if we decide as a company tomorrow to follow a policy that we just want to be comfortable with whatever content we people own today, we can also go back and end-up driving margins which are upwards of 75%, because our real cost structure that we people are sitting on within the company is the new content that we people are acquiring.
For the longest time for close to two decades had taken a call not to invest in new content and we have realized a folly because if you don’t invest in newer content, the company starts becoming irrelevant for the younger audience. Hence is a conscious call that people have taken that we will invest in content in a very heavy fashion, which means there will be on short-term basis, our cost structures are going to go back and head content does not come free of cost. But we believe in a period of next three to five years, it will boost our profitability in a significant fashion.
Jyoti Singh
Thank you so much.
Operator
Thank you. The next question is from the line of Mr Pulkit Chawla from Emkay Global Financial Service. Please go-ahead.
Pulkit Chawla
Yeah, hi. Thanks for taking my question. Sir, for the first part, I think, do you somehow feel that with the growing popularity of the shorts format, does something like a YouTube shorts cannibalize your long-term — long-term format given that today at this point of time, monetization is slightly better on the log format as compared to the short format. Does that make monetization at slightly more difficult?
And second, if you could just help me today, it’s been a year since you’ve now acquired Popitas where we are on the path to profitability. So last year was slightly weaker on the revenue growth front also. So if you could just highlight what steps have you taken for Pocket Asis?
Vikram Mehra
Okay. So let’s talk about the short format content. When we look at all of the short format apps, we see a massive potential upside that has not been factored in yet in terms of share of advertising revenue that we people can generate. You see at these apps as cannibalizing, we see these apps as something that can generate fresh set of eyeballs and hence fresh advertising, which will eventually get shared with the content creators. It’s a matter of time. Some of these short format apps even have contracts with us, which say that the day they start sharing revenues with any content creator, they will share there with us also. So we see these as the future growth potential points there. Often people ask me on music, what are the two unexpected growth triggers that may come in. Expected is market-share from our side or the basic growth that industry is seeing. The unplanned or unt — or unexpected or untimed IMFA will be it growth of subscription that may really surprise us. It may grow that rapidly on the streaming side. And second is short format apps ability to convert these eyeballs into advertising dollars that will get shared with us. That’s part one answer.
Part two you were asking about?
Pulkit Chawla
Yes. The pocket is profitability part. So on the revenue growth trajectory.
Vikram Mehra
We had gone pocket — if we people had written about that at a consolidated level, Saregama is going to be growing its revenue upwards of 30%. Pocket cannot lag behind. They have to go out there and grow at the same revenue. Otherwise, we will have a pressure. So they are growing right now at a healthy enough fashion and we are reasonably confident that we will be able to get these guys to breakeven or very close to breakeven as promised earlier by the end-of-the financial year.
Pulkit Chawla
Thanks again. That’s super helpful. Thank you.
Operator
Thank you. Next question is from the line of Ruchita Kard from iWealth. Please go-ahead.
Ruchita Ghadge
Hello, sir. A very good evening. So sir, my question was on the events business. So what are the kind of events that are lined-up for the next year if you can give me a sense on that?
Vikram Mehra
And there are all — we are working with a range of different kind of artists — artists who are signed with us, artists who are coming to us be seeing our ability to produce our India’s biggest tour with Diljit O Sanj. There is more work that may happen in international markets, maybe Diljit itself. There are Punjabi artists, there are South Indian artists. So there are a range of people that we are working with. We are also developing in parallel IP-based shows, which are independent of an individual artist, but the IP becomes bigger, like this series that we people have wherein we get a big Bollywood star of yesterday years, who tells us the stories of his or her movies and the songs behind it. We did it with Javid Dr Sahab. In the — in this financial year, we’ve already done with Java Dr Sab. We just did it with Vina Tamanji and you will see right now us pursuing this with more number of staff.
Similarly, we are doing musicals for kids. Grandpa is the brand-name and Linda which we people work, whereby we take some of the most iconic songs of like Lakhri Kikati, which were aimed at the younger children, combine it with some of the newer age music, give it some amount of prominence on digital platforms and then also turn them into live events where younger kids can come with or without their parents and also get some moral learnings out of that show. So all that is happening. Even that I’ve got a dedicated team which is exploring all possible opportunities. Good part is that there’s a lot of conviction internally in the system after the success that we people are seeing. And in the market, we are treated as the number-one producer in the country today as far like even shoes are concerned.
Ruchita Ghadge
Okay, so sir, now my question was in the direction that in the last you know, on nine months or 12 months, if I see, on an average, our growth has been very massive. So going ahead, obviously, the base is going to be higher. So would that growth taper down or you see directionally it should grow in, you know, maybe 50% 60%.
Vikram Mehra
Ma’am, let me comment right now vertical by vertical. On the music side, we maintain our mid to long-term period growth position of 22% to 23%. On video, we are projecting a growth of 25%. On Carvan, they will be further de-growth that will happen and then it will stabilize and hopefully start showing a marginal growth upwards. On live event side, honestly, it’s very early for me to go back and give any number. It will depend right now. One big show comes from our partnership happens from outside, the numbers keep on changing. So live event give us another few quarters for us to stabilize it. After that, we’ll be happy to share our growth projections. But on the more stable businesses, I’ve shared my projections with you.
Ruchita Ghadge
Got it, got it. And sir, just one last question. Sorry if I’m repeating it, but just wanted to understand, get a sense on the content cost, which is amortized. So if you could give an example of INR100 content we are acquiring, how much of it are we amortizing? How much of it is marketing? And going ahead, then how do we amortize that?
Vikram Mehra
Okay. So I’ll ask Pankaj, our CFO, to go back and take this.
Pankaj Chaturvedi
So see, the ratio between content acquisition and marketing is typically 80-20. So if content is acquired at INR100, INR80 is the content acquisition, INR20 is the marketing. The INR20 of marketing gets charged-off immediately. While of 80 we write-off 20% in year-one, which is 16%. So if you just add-up, it is about 36% that this charge-off in year-one. At an overall level, the entire content is charged-off in a period of 10 years.
Ruchita Ghadge
And just from second year, would it become lower and lower like 20% in year-one, so then maybe 10% to.
Pankaj Chaturvedi
20% becomes 15% and then remaining 8 years are equal?
Ruchita Ghadge
Okay. Understood. Understood. Yeah, that was it from my side. Thank you so much.
Pankaj Chaturvedi
Thank you.
Operator
Thank you. Next question is from the line of Priyankar Sarkar from Square 64 Capital Advisors LLP. Please go-ahead.
Priyankar Sarkar
Hi, good afternoon, Vikram.
Vikram Mehra
Hi.
Priyankar Sarkar
Vikram, couple of questions. If Airtel Wink did not go out-of-the market, how much more revenue growth could we have done in this quarter? Any ballpark figure, if you can help us with that?
Vikram Mehra
Pass that one,. Next. Okay. Now I that.
Priyankar Sarkar
No, because the thing is, when we speak to the industry, they are saying that the growth in music licensing at an industry level has slowed down, right, to the early teens. And I wanted to get your view because you have been very bullish on that, but that’s not the feedback I get when I speak to on the people in the industry. So where-is the disconnect?
Vikram Mehra
So I’m assuming you’re giving us a pat on the back.
Priyankar Sarkar
I mean, sir, I would look at you without the artist management. So for me, you have grown at 12.5%. That’s claim we are growing 19.5%. So.
Vikram Mehra
When you’re looking at music, then you can remove my catalog also and say I’m going to look at — see that is your call. Everybody else has got the same artist management sitting in. All my competitors have fined artists and their revenues are coming part of it. It just so happens right now, we are splitting them. But every major label that you pick-up globally or India has an artist management piece connected to it. It’s integral part of music. Tomorrow, you may say I will not include YouTube as part of your music licensing and what do I do. So that’s entirely your prerogative, but I’ll again repeat, I think it’s flawed. You need to combine both these to understand music, what is the potential of music. Because I invest in artists who is going out there and singing my song. I make money not just from the song, from the artists at the same time and everybody is following their methodology. But that notwithstanding your part that is there a kind of a slow-up, see, you need to understand when four of the platforms decide to go from free-to either paid or they shut-down or there will be some amount of pressure that will start getting generated in the market.
What we are very bullish about there as an industry is that, that shutdown is resulting into subscription slowly growing. At the end-of-the year right now, which is the end of next quarter, I will be sharing some flavor of how revenue that make from subscription is going up. These are still early shoots, but we can see subscription economy really moving as the people go-forward, which is a great part.
For us, the fact that our — if our growth numbers have gone up is because our market-share has gone up. Market-share has gone up, one, because we are actively investing in newer content. So is the number-one player in the market. They are also actively investing in newer content. We have a higher hit rate and that you can go back and judge by yourself by looking at the numbers of all the newer content that will come out. We have a far higher hit rate compared to a direct competitor of the number-one guy across all the languages, which is helping us grow faster than the rate at which industry is moving.
Priyankar Sarkar
Fair. Sir, if I can squeeze in one more, how is the growth in areas such as Punjabi, Bhojpuri and other regional language extra barring the bigger Southern and southern industries?
Vikram Mehra
Sir, the growth is there across all languages for a player like us because our market-share is going up. What you can — a nice way of doing it, I’ll tell you how we people look at-market share of the newer content. We go out there and take any calendar year, so take a calendar year of 2024. Check-out every song across every language released by every label in the year 2024. Check-out the cumulative views of each of these songs as of 31st December 2024. So everybody gets an equal chance out here and then start looking at-the-market share. You will see market-share going up across all languages. We have one language where we are relatively weak and one language that we have not entered ourselves into. Apart from that, every major language right now, you will see us either number-one or number two position, including now we — last quarter we — quarter two, we actually entered Gary and we are now sitting at number-one position in also.
Priyankar Sarkar
Fair enough. Okay. Thank you, sir. Wish you all the best.
Vikram Mehra
Thank you.
Operator
Thank you. Next question is from the line of Swapnil from JM Financial. Please go-ahead.
Swapnil Potdukhe
Hi, thanks for the opportunity. My question is with respect to your guidance at the start of the year, wherein we had said that music licensing plus artist management will grow around 25% to 26%. Now if I were to look at your numbers till 9m, it appears that we are somewhere in-between 17% to 18%. So we are quite far away from our original guidance for this particular year. So any thoughts around how.
Vikram Mehra
See our guidance is 22% to 23% right now on this entire music vertical. Are we going a little slower than that in this financial year? Yes, you are absolutely right. But we maintain our guidance right now on a medium to long-term basis of 22% 23%. You will have a quarter or two quarters here and there slowing down and slightly unexpected things like a platform like Atel Wing Shop, which are not expected. So there are some amount of dents that we end-up taking. But we believe that on a medium to long-term basis, we are on solid grounds and we will come back on this ’22 to ’23. So if you’re going to be looking at us on a five-year basis, you will see a CAGR of that percentage. Some year will be higher, some years will be slightly lower.
Swapnil Potdukhe
Okay. And secondly on your cost side, if you look at your employee expenses, there has been some volatility in terms of how much employee cost have been there quarter-on-quarter basis. So you started with roughly around INR26 in 1Q, then it went up to INR30 crores. Now it’s down to INR27 crores. Just wanted to get the — I mean, what’s bringing such as.
Vikram Mehra
Only on the basis of two quarters, I think you need to go back and look at the number maybe on a 12-quarter basis, then you will start seeing a clear pattern coming in. We people announce our bonuses and increments in the month of July. So Q2 ends up typically being higher. Also remember, this is this year onwards, what you are seeing is entire pocket salaries are also getting combined with our numbers, which was not the case necessarily in the past. So that’s the jump that you are seeing. We very closely monitor employee expenses as a percentage of the revenue and we are comfortable at the rate at which it’s moving. There is nothing suddenly on the employee expenses right now, which is going up.
Pankaj Chaturvedi
I’ll just add to it. If you see the quarterly percentages of employee cost as a percentage to revenue from operations, you will see some ups and downs because of the denominator impact. One is the consolidation of pocket just like if you see this current quarter, because of the used surge in revenues led by live events, the percentage appears to be 6%, which again is artificially low. Just look at our last year numbers, the percentages have been stable at about 11% 12%. Some quarters, yes, there will be an impact on account of the bonuses payout, but otherwise, the percentages are in control. So just see the revenue numbers, how they have moved, otherwise the employee costs are pretty much stable.
Swapnil Potdukhe
Understood,. And just a last one if I can squeeze in. So we have been talking about our carwa business, you know, some — we’ve taken some efficiency efforts there, right, trying to bump-up the margins on that side. Anything that you can call-out as to where are we in terms of that effort, any improvement in the margin of the business?
Vikram Mehra
At the end of Q4, all the cost correction initiatives that needed to be rolled-out will get rolled-out because there was a large workforce that we people had as part of the Carvan team that were responsible for selling the products in the retail market or — and we also had inventory line with us, so we could not take a call on an overnight basis to make any changes. It’s a slow process that has happened here, whereby we have brought down the inventory and lot of people from the retail side have been helped by getting them jobs out there in the outside area. So you will see from Q1 of the next financial year, the full impact of that coming in.
Right now, all we are seeing is that the revenue is falling down, but is not always resulting into a greater efficiency because the — some of the manpower reduction has not been exactly in sync with the fall in revenue. Give us one more quarter. Q4 will be the last quarter in which this process is going to continue. Q1 onwards, you will start seeing numbers coming on account of.
Swapnil Potdukhe
Got it, thanks a lot for the opportunity and all the best.
Operator
Thank you. Next question is from the line of Abhishek Kumar from Saxyum Wealth. Please go-ahead.
Abhishek Kumar
Hi, good evening. So my question, I guess most of it is answered. I had this question on the hip-hop 4a. So just a question. Sorry, could not — I can’t hear you sorry. My question was on the hip-hop 4a, which we have made this quarter and our partnership with Hustle IV and where we have acquired the songs and plus the artist. So just wanted to know the thought process behind it and how our strategy would be going ahead in this. That’s all.
Vikram Mehra
Now you have now — this is one of my separate areas Abhi. Listen, very consciously within Saregama, we want to correct the fact that majority of our content appeal is to the middle age or the older people because this was the company which was used to live on the HMV legacy. Over the last few years, we have made it taken a lot of steps to go back and correct it so the company starts becoming relevant to the younger people also because they will — once they get used to my music here, they will also give us revenue for the next 40, 50 years of their lives. There have been moves right now picking-up new film music or creating new pop music, creating video content which is relevant to the younger people. In the same direction, we realize that the youth of the country, you are not talking about 14 to, 26 27, that age group is very, very big on the hip-hop side.
Hip-hop is not the kind of music which is consumed by everyone in this age group. For people who consume it, consume a lot of it and also go out there and attend the live events of the artists whose music they are fond of. That’s what has got us excited. We experimented in December, January of January of ’24 with working with people like Krishna and, who are the big boys of hip-hop music, we started tasting success with that. And they also took time to accept the fact that the giant of pop music is ready to go out there and make a foray into hip-hop also. Our next experiment was with MTV, whereby we did a deal with them whereby we had not picked-up ever their music in the past, we had nothing to do with it. And this time, we ended-up picking-up the music. And if you go by just by the data, hip-hop season four has been the best-performing hustle ever. Hustle has never done as well as they have done right in partnership with us. We are also now signing their number-one artist who won this year’s hustle and some three other artists as part of exclusive deal, whereby they will record music with us and we will also manage their live events business. As we go-forward, you will see more activity happening out there in this space.
Our attempt is again to create music which is relevant to various of the society. Sometimes we do it on the basis of language cuts. Sometimes we do it on the basis of film or non-film. While I’m talking about hip-hop, you will also see some more action happening in Q4 on Karnatik music, which is more traditional side we are moving right now. We have not done too much of investment in the recent times on Karnatik. You will see us creating a property and getting some of the younger Karnati guys and also putting up their content. So it’s a diversified approach that we people take at Saregama across each of our verticals. So that we are never too dependent on any one area, while we also keep on monitoring the return on investment profile of various areas to decide how much budget we should be giving right now to each of these.
Abhishek Kumar
No, thanks a lot for our detailed, and it’s really good to know that we are moving towards the more younger audience of 14 to 26, which you mentioned. So that is something which is, I guess really appreciated. And last question, I know previous participants have asked about live events. So this is a bit different aspect given that we have sent kind of set a benchmark with respect to the concert this year and which was a super success. So how do we kind of move ahead from this one? So the benchmark which you have set is really high and how do you think about the artists, which say we’ll have throughout this year Indian artists, Punjabi artist in the — or maybe if you think of any artist.
Vikram Mehra
Sorry. I had answered this question earlier also. We are looking at a range of artists with whom we can go out there and work the fact of life is there is only one in this country you also have other artists who are very, very good, like Arijit but, he is the ultimate ambassador of non-film music and a brand in his own ride. So can I go back and replicate the success of this tour every quarter? It may not go back and happen. What it has done is put serious amount of confidence in the minds of the management team, our partners and our investors that this movement of investing in live events is the right moment. An Indian customer are ready to pay, provided the experience is right, provided the artists as a brand in its own right. So on the artist management vertical, the artists with whom we are working of the kind of music we are giving to them, we are keeping in mind that eventually we need to turn them into huge live artists also at the same time.
We are also in dialogue with some other Punjabi and South India-based artists and working with them and seeing how do we go back and create, if not as big as LG tour, multiple tours maybe half their size. So please don’t expect every quarter or every year immediately this to happen, but it’s very, very clear that live business is here to stay and it is going to eventually become a huge chunk of our revenue as we will go-forward.
Abhishek Kumar
Okay. Got it. Thanks a lot, and to everyone. Thank you.
Operator
Thank you. Next question is from the line of Purav Rathi from RBA Finance and Investments. Please go-ahead.
Purab Rathi
Hi, hi, sir. Good evening. Congratulations on a record set of numbers., sir, my question would be on a more of a — you see how live events are getting traction from, as you said, the younger audiences. So would want to know if Saregama would be open to touring like how we send Eljito Sanjab abroad, would we be seeing artists abroad such as a Taylor Swift or a cold play who just backed Bombay, Saregama touring them and producing shows with them.
Vikram Mehra
Conceptual level, yes.
Purab Rathi
Does have scope of you know touring at abroad, but also getting artists abroad in India, right, simply.
Vikram Mehra
Conceptually in agreement with you. But remember, we are not an even production company. We are an IP-based company which invests in artists. So are we talking to some of the international guys? Yes, we are in dialogue. But everywhere, we are also finding ways in which even if an international artist comes in, can I do the opening act of that international artist with the artist. Can I create some more music with that artist out here as a collab between that artist and an Indian artist? We are looking at all those kind of possibilities where that also opens me up right now to audience living outside India, non-Indians consuming our R music. When I to one other participant, when I said that the artist management and music licensing are completely connected to each other, literally one and the same thing. That’s the point I was trying to drive and the extension of this is the live business. So short answer to question is yes.
Purab Rathi
Also, sir, one last question. As you said around for live events ticketing sponsorship. Just curious, we are toward the Luminati Tour in USA and Canada. Why were the ticketing revenues of those shows not counted for in our books?
Vikram Mehra
Now, so it all depends on the kind of structured deals that we people were doing there. We there were working in partnership with the local guy. Again, it also depends right now because they were bigger shows and we wanted to go out there and hedge our risk. So our role was relatively more limited, while in India, the entire show was 100% produced by us. So our roles also keeps on varying depending on our strengths in any individual markets.
Purab Rathi
Thank you. That answers my question.
Operator
Thank you. Next question is from the line of Ravikumar Naradi from Naredi Investments Private Limited. Please proceed.
Ravikumar Naredi
Sir, again, I congratulate good numbers you had given. But in last nine months result, our revenue rise by 72%, but not profit — net profit is barely no rise. So will you comment on that?
Vikram Mehra
Revenue has gone up by 72%, so is the.
Ravikumar Naredi
Non-net profit is barely no rise. Sir, but many of — many up to.
Vikram Mehra
I mean numbers are reacting. But principal, even every call for the last four quarters I’m saying this. As we have started the journey of investing heavily in content, my — my charge-off of the new content will just about go back and match the increase in the revenue that is coming on account of the new content. So that’s been — that’s — and we have taken a conscious call to go out there and do it and I’ve shared with the entire investor community before we ended-up starting to spend this money. So this is going to continue for another four quarters here. It was a six-quarter story, two quarters have got over, four more quarters, this is going to go back and happen. Because after that, you will see the spends that we are doing in the newer content will start increasing only in a linear fashion and hence, the revenue growth is going to be far higher than the growth on the cost charge-off that we have done. Start growing substantially.
Ravikumar Naredi
Yes. And this cost of content rises now higher side. Now it is almost 40% to 50% of film cost. So how we earn more in this scenario?
Vikram Mehra
So we are earning more meaning — sorry, I’m not very clear about your question.
Ravikumar Naredi
Sir, our content cost is on very higher side rate is almost 40% to 50% of film cost. So how we earn more money from these higher content costs?
Vikram Mehra
How did you say 40% to 50% of the film cost?
Ravikumar Naredi
Almost I am seeing with some producer, they are saying they are so sir.
Vikram Mehra
Then people may be buying the music very, very expensive. We don’t buy that way., I’ve shared in multiple forums and in multiple calls also with you is that our entire buying process is a data analytics-based process, whereby predictive models are used to go back and understand how much money will we be able to generate from an album over the next five years because you know that internal guidelines of payback is five years. Whatever models are showing, we don’t go and pay beyond that. So we are never close to, 14% 50%, not even anywhere half close to that.
Ravikumar Naredi
Okay. Okay. Okay. So it is in our mind, we have to recover in five years, right?
Vikram Mehra
Yes, sir, that’s a guiding principle for everybody in the management team. If there is one thing that binds the entire music business from both of licensing and artist management, it is that the total investment you are making has to get recovered in less than five-year period. Five is the outer number.
Ravikumar Naredi
Right, right. Sir, is this yadly movies, we will come in profit soon or it takes another few years.
Vikram Mehra
Sir, it will — you will see right now come model transitioning usually has started showing profits, then the old model or ually, if you remember, we used to make films and license them directly to the digital platforms. During COVID, we realized that the digital platforms were refusing now to take movies which are non-Big star directly onto their platform. So we have changed our strategy and saying we will make movies that are taken to theatrical part first and then we are moving across to the platforms or TD platforms. You are seeing in this quarter is literally one movie of the past that was sitting there with us. That’s the only movie which was an unsold movie and in our prudence we have taken to — decided to go back and completely charge it off.
Ravikumar Naredi
Okay. Okay. Okay. Thank you and all the best.
Operator
Thank you. Ladies and gentlemen, we will take this as the last question for the day. I would now like to hand the conference over to the management for the closing comments.
Vikram Mehra
Hi, we can see this quarter as an aberration or we can see this quarter as the definite proof that these strategic steps that we people are taking at Saregama are all moving in the right direction diversifying the our assholes right now beyond the music business alone cement even within the music business not being dependent only on one kind of music, whether we are investing right now in film as well as nonfilm, popular as well as hip hop, as well as and emotional. We are investing in all the major languages of the country.
We are investing — we are not relying on making money in music only out of what a YouTube or a Spotify will give us. We are also investing along with the music on the artist who is making the music so that the recovery of the music can also happen from that individual artist who’s raw-material here to also getting into other entertainment IP areas like live events or video business or within video business short format content, it just tells you that at Saregama, we are very, very open right now to trying and exploring various other entertainment IP verticals. It not only allows us to diversify our hedge our risk, but also allows us to create large synergy across between all these verticals that we will have.
Second, use of technology and data over humans’ ability to decide what’s going to work and how much to pay. I think that’s helping us in a very big fashion. And having a manageable strength, which has not been taken out of only the music industry, but we are picking-up people right now who are the best from FMCG and durable and services also and getting them in. It’s the combination of all these three factors, which is giving us a massive edge over our competitors. We are growing at a rate which is faster. We have a hit rate ratio right now, which is better. Hopefully, we will be able to drive — as we drive more synergy between various verticals, the efficiency levels are also going to go up and scale will start giving its own cost advantage. So overall, we as management team are extremely bullish on the future side and we believe that the company will go strength-to-strength. Thank you and look-forward to all your support.
Operator
Thank you. On behalf of Emkay Global Financial Services, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.