Saregama India Limited Just Beat Revenue By 8.9%: Here's What Analysts Think Will Happen Next

Saregama India Limited (NSE:SAREGAMA) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was a pretty mixed result, with revenues beating expectations to hit ₹12b. Statutory earnings fell 3.5% short of analyst forecasts, reaching ₹10.61 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the most recent consensus for Saregama India from five analysts is for revenues of ₹13.8b in 2026. If met, it would imply a solid 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 24% to ₹13.20. Before this earnings report, the analysts had been forecasting revenues of ₹12.4b and earnings per share (EPS) of ₹13.25 in 2026. It seems sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

Check out our latest analysis for Saregama India

It may not be a surprise to see thatthe analysts have reconfirmed their price target of ₹600, implying that the uplift in revenue is not expected to greatly contribute to Saregama India's valuation in the near term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Saregama India at ₹641 per share, while the most bearish prices it at ₹513. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Saregama India's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% annually. Factoring in the forecast slowdown in growth, it looks like Saregama India is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also upgraded their revenue forecasts, although the latest estimates suggest that Saregama India will grow in line with the overall industry. The consensus price target held steady at ₹600, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Saregama India analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Saregama India that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.