Saregama sees 34% growth in Carvaan for Q1 FY20

Saregama, India’s oldest music label and the youngest movie studio, has announced a 9 per cent increase in its revenues for the 1st Quarter ended June 30, 2019 on YoY basis. 

The company launched two new products in the first quarter Carvaan Go – the mobile variant targeted at 35-60 years segment and Carvaan 2.0 – the new age variant supporting both music and wifi based podcasts, broadening Carvaan’s appeal to all members of households. The company registered 34 per cent growth in Q1 FY20 in Carvaan units YoY basis, this is despite falling store footfalls and suppressed demand in almost all categories. In Q1 of FY2019-20 the company registered sale of 219,000 units of Carvaan. 

The focus this quarter was to expand Carvaan’s footprint outside top 10 towns through targeted marketing campaigns, dealer network and sales manpower expansion in these areas. The net result was that the sales contribution of Outside top 10 towns went from 39 per cent in Q4 FY2018-19 to 43 per cent in Q1 FY2019-20. 

To promote pull for Carvaan demand in outside top 10 towns, the company has started focused investment in advertisement campaigns. In addition, company is also investing in building deeper sales structure in these areas. This has created little impact on the profitability and company reported PBT of Rs 20 million in Q1 FY2020 standalone basis. 

The company has also started publishing consolidated results from this quarter onward and company reported near breakeven results in Q1 FY19 to Rs 2.3 million. As part of structural change, the company has decided to convert all existing SAR to ESOP. 

In terms of licensing, income continued its growth trajectory and registered 16 per cent growth in revenues on YoY basis. 

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