This multibagger stock has surged over 420% this year. Should you buy/hold?

Market


Music label Saregama India shares have given multibagger returns in 2021 (year-to-date or YTD) so far as the stock has surged more than 420% during the period. From trading around 830 per share level in early January, the multibagger stock currently trades above 4,320 apiece on the BSE. 

Earlier this week, the company reported a 16% increase in its consolidated net profit at 33.8 crore for the second quarter ended September from 29 crore in the year-ago quarter. Its revenue from operations was up 34% at 145 crore as against 108 crore in the corresponding quarter of the previous fiscal.

Saregama share price has grown by around 18.5x over the past five years (from 238 in October 2016 to 4,440 levels in October 2021). Brokerage firm ICICI Securities expects expect digital monetisation to provide sustained growth but given the sharp run up (up 160% in last six months). It has maintained its ‘Hold’ rating on the stock.

The brokerage expects growth trajectory in music licencing, which the management envisages to grow at 20%+ in medium term, along with new content performance, recovery in Carvaan on the back of festive season and expansion in movies and web series segment to act as key triggers for future price performance.

Saregama India (Saregama) is India’s oldest music label with songs across various languages, which is monetised over various formats such as digitals (streaming, YouTube), physical (Carvaan) and television.

Besides Saregama, in its telecom & media coverage, ICICI Securities said it likes Tata Communication on the back of the firm’s cash flow generation consistency and growth levers like cloud, edge & security, IoT. Its Buy rating on Tata Comm comes with a target price of 17,25 per share.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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