Stocks to Buy: Nuvama sees 28% upside in this music label on paid subscription growth
Published on 18/09/2025 11:10 AM
Stocks to Buy: Nuvama sees 28% upside in this music label on paid subscription growthSaregama India plans to invest ₹700 crore in new music content over the next two years, targeting a 25-30% share of incremental music content. The music segment contributes around 60% of the company's business.By Meghna Sen September 18, 2025, 11:10:00 AM IST (Published)2 Min ReadBrokerage firm Nuvama Institutional Equities has retained its 'Buy' rating on Saregama India Ltd. on Thursday, September 18.
The brokerage has a price target of ₹630 per share, which suggests a further upside of 28% from the stock's last closing level on Wednesday.
According to Nuvama, Saregama India plans to invest ₹700 crore in new music content over the next two years, targeting a 25-30% share of incremental music content. The music segment contributes around 60% of the company's business.
Investments are expected to have a 4-5 year payback, with new music generating an internal rate of return (IRR) of 26%. The company is also leveraging AI to cut content creation costs.
Once costs are fully charged off in 10 years, music margins could expand to 90%. Saregama intends to allocate 50% of its capital to Hindi music and the rest to regional music, where margins are higher.
Overall, Nuvama expects the music business to grow at a 20-23% CAGR, while live events may expand at 25-30% CAGR.
On the subscription side, Saregama is betting on paid music services as the next growth driver. Currently, penetration in India is just 1%, compared with 13% in China.
As free streaming consolidates, platforms like Spotify and JioSaavn are expected to drive paid subscriber growth over the next 18 months.
According to Nuvama, if India reaches 5 crore paid subscribers, it could generate ₹6,000 crore in additional revenue, with ₹3,000 crore flowing to the music licensing segment. Saregama, with a potential 30% market share, could capture ₹1,800 crore. The company is eyeing 10 crore paid users, each generating around ₹100 per month, with paid subscribers delivering 2.5-5x more revenue than free users.
Meanwhile, Saregama is also expanding into live events, a low-risk, high-IRR business with single-digit margins, and has built a presence in artist management, currently handling over 230 artists, a high-margin vertical.Continue ReadingNote To ReadersDisclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsSaregamaSaregama Indiashare market today