At a Glance
Tips Industries Ltd isn’t just spinning old Bollywood CDs anymore. With a ₹8,600 Cr market cap and return metrics that make IT firms jealous, the music label has quietly turned into a profit-spewing, debt-free cash machine. But at 51x P/E, is it now too “premium” for your playlist?
🎬 WTF Do They Even Do?
Let’s break it down, because “music company” doesn’t do justice here:
- 🎧 Owns 30,000+ tracks — from 90s bangers to niche regional hits.
- 🎥 Produced ~40 films, including Punjabi blockbusters (yes, they’re big in Ludhiana).
- 📺 Earns via YouTube, Spotify, Gaana, Wynk, satellite TV, and film rights.
- 💼 Revenue split:
- 70% from music IP (royalties & streaming)
- 30% from film production/distribution
Basically, they earn when you cry over Pyaar Kiya Toh Darna Kya or dance to Tip Tip Barsa Paani — and this cash flow keeps on flowing.
📊 Financials: YouTube View = Profit?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 91 | 136 | 187 | 242 | 311 |
| Net Profit (₹ Cr) | 43 | 65 | 77 | 127 | 167 |
| ROCE | 64% | 86% | 87% | 104% | 112% 🔥 |
| OPM | 61% | 64% | 55% | 66% | 67% |
Key Highlights:
- 5Y profit CAGR: 71.5%
- Operating Margin: Consistently above 50%
- Debt: Zero, just like your playlist’s ads after YouTube Premium
- Dividend payout: ~55% — thank you for your service
💸 Valuation: Crack or Classic?
Let’s do the math before the DJ drops the beat:
- CMP: ₹674
- EPS FY25: ₹13.03
- P/E: ~52x
- Industry P/E: Saregama (48x), Basilic (24x), Prime Focus (n/a because… losses)
🎯 EduFair Value Range (based on 30x–40x PE on FY26E EPS of ₹16):
- ₹480 – ₹640
🧠 At current ₹674, the stock already prices in perfection, unicorns, and Himesh Reshammiya’s comeback.
🔥 What’s Cooking?
- FII holding rose from 0.64% to 8.23% in 2 years. Not just desis liking old songs anymore.
- DIIs have trimmed positions in FY25, but overall institutions own ~11%.
- Recently active in:
- Punjabi films + music
- Scaling IP monetization with streaming platforms
- Analyst meets every quarter (someone’s flexing the balance sheet)
📉 Balance Sheet: How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity | ₹13 Cr |
| Reserves | ₹197 Cr |
| Borrowings | ₹3 Cr |
| Investments | ₹95 Cr |
| Total Assets | ₹339 Cr |
| Net Cash | ₹120 Cr from Ops in FY25 |
→ Company is debt-free, high reserves, and investing excess cash — mostly in music IP and film rights.
💵 Cash Flow: Sab Number Game Hai
| Metric | FY25 |
|---|---|
| CFO | ₹120 Cr |
| FCF | ~₹100 Cr (low capex) |
| CFI | +₹11 Cr |
| CFF | -₹139 Cr (dividends + buybacks maybe?) |
→ Consistent free cash flow = dividend ka bhangra every year.
🧮 Ratios: Sexy or Stressy?
- ROE: 85.6% — find a bank giving this return and we’ll switch careers.
- ROCE: 112% — no this isn’t a typo.
- P/B: 41x — yikes.
- Working capital days: Up from 6 to 178 ⚠️
- Might be from delayed collections from OTT partners or new film rights deals.
- Cash Conversion Cycle: 32 days — relatively tight.
💔 Red Flags?
- Promoter holding dropped from 75% to 64% in 2 years 👀
- Working capital stretch could signal either aggressive accounting or content licensing delays
- Valuation is euphoric — you’re not paying for music rights, you’re paying for nostalgia.
🧬 Shareholding Snapshot
| Category | Mar 2023 | Mar 2025 |
|---|---|---|
| Promoters | 75.00% | 64.15% 📉 |
| FIIs | 0.05% | 8.23% 🚀 |
| DIIs | 0.00% | 3.52% |
| Public | 24.95% | 24.10% |
🧠 EduInvesting Verdict™
Tips Music is the D-Mart of Bollywood nostalgia — low asset, high margin, cash-rich business built on emotion and algorithms. But with a P/E north of 50 and P/B at 41, you’re not buying a music label, you’re buying a cult.
If you love compounding, dividends, and can stomach valuation risk — sure, keep this in your playlist. But don’t expect a remix rally unless earnings hit 200+ Cr next year.
FV Range: ₹480 – ₹640.
Current: ₹674 — not crazy, but not exactly chill either.
✍️ Written by Prashant | 📅 June 28, 2025
Tags: Tips Industries, Music Stocks India, High ROE Stocks, Bollywood Business, EduInvesting, Saregama vs Tips, ROCE Kings, Nostalgia Investing, Smallcap Compounders, Dividends
Ask ChatGPT
