Saregama India Limited Just Beat Revenue Estimates By 13%

Saregama India Limited (NSE:SAREGAMA) just released its latest second-quarter results and things are looking bullish. Saregama India beat expectations, with revenue hitting ₹2.4b (13% ahead of estimates) and EPS reaching ₹2.33 (a 5.9% beat). 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Saregama India

Taking into account the latest results, the most recent consensus for Saregama India from six analysts is for revenues of ₹10.2b in 2025. If met, it would imply a meaningful 12% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 12% to ₹11.00. In the lead-up to this report, the analysts had been modelling revenues of ₹10.1b and earnings per share (EPS) of ₹10.84 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 7.5% to ₹589. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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 ₹639 per share, while the most bearish prices it at ₹496. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Saregama India's past performance and to peers in the same industry. It's clear from the latest estimates that Saregama India's rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Saregama India to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Saregama India 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.