Saregama Q4 FY26: Record EBITDA, a music-led rebound, and a deliberate reset in events and video

Saregama ended Q4 FY26 with its highest ever quarterly adjusted EBITDA. Revenue from operations came in at INR 287.4 crore, up 19% year on year. Adjusted EBITDA rose to INR 132.7 crore, up 31%, while PAT for the quarter was INR 74.1 crore, up 24%. Operational PBT was INR 105.0 crore, also up 37%.

The quarter mattered because it reinforced management’s core claim that the softer music growth seen earlier in the year was largely a timing issue. In the earnings call, management said H1 music growth was 8%, while H2 accelerated to 26% as releases picked up. The MD also pointed out that the base effect from Airtel Wynk shutting down is now largely out of the denominator, making growth trends cleaner.

FY26: revenue fell, but earnings improved

On a full-year basis, revenue from operations declined 16% to INR 984.6 crore. This fall was driven by the lumpy live events business, which had an outsized FY25 because of Diljit Dosanjh’s India tour. Despite the lower topline, adjusted EBITDA grew 13% to INR 404.7 crore, and operational PBT increased 8% to INR 292.6 crore. PAT for FY26 was broadly flat at INR 206.2 crore, up 1%.

Saregama’s FY26 performance therefore looks like a mix of two stories. The first is the steady scaling of the music vertical, including licensing, artiste management, and retail. The second is a deliberate reconfiguration of the video business and a reset in live events.

Music: the primary engine, with a heavy investment cycle

Music remained the dominant contributor in FY26. The investor presentation reports music annual revenue of INR 814.4 crore, up 17%, and music annual EBITDA of INR 516.7 crore, up 22%. Music net margin (after content charge) was INR 376.8 crore, up 28%. Quarterly trends also show strong momentum, with music revenue rising to INR 242.9 crore in Q4 FY26 and music EBITDA reaching INR 165.3 crore.

A key part of the music strategy is aggressive investment in content, paired with discipline in pricing. FY26 content investment included INR 235.4 crore in new music, plus INR 104.7 crore in catalogue purchases. Management reiterated the five-year payback guideline for content acquisition, and cited an example of walking away from Dhurandhar 2 music due to pricing not meeting the payback framework.

The company is also signalling that the heavy step-up in content investment is likely to moderate after FY27. Management guided that FY27 new music content budget is expected to be INR 300 to 350 crore, and that from FY28 onward the plan is to increase spending more linearly rather than through large step jumps.

Bhansali Productions: securing the premium Hindi pipeline

The most consequential structural move disclosed in the deck and discussed in the call is Saregama’s strategic investment in Bhansali Productions. The company has taken a significant minority ownership stake, with valuation linked to the next three years of financial performance.

The commercial logic is straightforward. Management said the arrangement provides exclusive access to marquee Hindi film music at a predictable cost based on a predefined formula. Importantly, management framed this as a way to secure its A and B+ Hindi film music album requirements for the next 24 to 30 months. The partnership is positioned as playing to each party’s strengths, with Bhansali retaining creative control while Saregama provides financial oversight.

The FY27 music pipeline called out in the concall includes Bhansali’s Love and War, Dharma’s Naagzilla, and multiple large South films.

Live events: a reset year, plus a new festival IP

Live events revenue fell sharply in FY26 to INR 61.8 crore, down 78% year on year. The company explained that FY25 had revenue from Diljit Dosanjh’s India tour, a one-off event that does not recur at the same frequency.

In Q4, Saregama launched its first owned music festival IP, UN40, positioned for audiences under 40. Management said the festival delivered 12,000 plus footfalls and attracted eight sponsor brands. However, it also resulted in losses in the events segment for the quarter, which management attributed primarily to the early-stage investment needed to establish a festival format.

The management’s timeline is explicit: UN40 is expected to break even by FY28, and the next edition is already announced for Feb 2027. Beyond UN40, the company also outlined plans to launch smaller concerts under the Carvaan Live branding, targeting older audiences who prefer seated, premium listening experiences, and to increase focus on diaspora tours in markets like the US.

Video: decline by design

Video performance was deliberately scaled down. The earnings deck states that the company consciously reduced its films production business under Yoodlee and instead invested in Bhansali Productions. In the concall, management made the intent unambiguous: it does not expect the video vertical to go up substantially within the company, and focus will remain on TV serials, digital content, and short-format.

In the consolidated quarterly financial summary, FY26 video revenue is shown at INR 108.4 crore (down 44% year on year), and Q4 FY26 video revenue at INR 32.2 crore.

Cash flow and balance sheet: investments are visible in the numbers

Saregama remains effectively net debt free on a headline basis, though the balance sheet shows borrowings used for temporary working capital (INR 70.4 crore proceeds and repayments net in cash flow; borrowings appear under current liabilities as temporary WC limits).

A key point for investors to track is cash conversion during the investment cycle. FY26 operating cash flow was INR 80.6 crore versus INR 385.4 crore in FY25, driven in part by a negative working capital movement of INR 203.1 crore. Cash and cash equivalents ended FY26 at INR 28.2 crore compared with INR 69.4 crore in FY25, with treasury balances also reduced as funds were deployed.

Management also explained an optical issue in segmental reporting: unallocable expenditure is net of other income, and as QIP funds are deployed into content and acquisitions, interest income reduces, mechanically increasing the net unallocable line.

What management guided for next

Management reiterated a medium-term framework that ties content investment to growth and margin expansion. The music vertical, including licensing, artiste management, and retail, is guided to deliver 20% to 23% CAGR in revenue over the medium term, with an annual EBITDA margin target of 60% to 65% for that vertical.

In parallel, the company expects UN40 to take multiple years to mature, while video is expected to remain a smaller contributor after the film production pullback.

Takeaways

Saregama’s Q4 FY26 results highlight a company leaning into a long-duration music monetisation thesis while actively reshaping its business mix. The record quarterly adjusted EBITDA underscores operating leverage as music releases land and platform disruptions fade from the base.

At the same time, the numbers show the cost of building for the next decade: content investments, catalogue purchases, acquisitions, and festival IP creation are all visible in cash flow and treasury balances. The next few quarters will be judged on two things: whether music growth sustains in a cleaner industry structure, and whether the new pipeline security through Bhansali Productions translates into consistent, high-quality releases without compromising return discipline.