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Check Before You Invest : Shemaroo Entertainment Ltd

BSE: 538685 NSE: SHEMAROO ISIN: INE363M01019
  |   Sector:  Media   |   Industry:  Film Production, Distribution & Entertainment

Snapshot

Q.1 Which industry/sub-sector does Shemaroo Entertainment Ltd belong to?
Shemaroo Entertainment Ltd belongs to the Media sector, operating specifically within the Film Production, Distribution & Entertainment segment.
Q.2 Is Shemaroo Entertainment Ltd a good quality company?
Shemaroo Entertainment Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Shemaroo Entertainment Ltd undervalued or overvalued?
Shemaroo Entertainment Ltd appears Somewhat Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings - -
Price to Book 1.03 0.69
Price to Sales 0.5 0.70
EV to EBITDA -2.17 14.23
Q.4 Is Shemaroo Entertainment Ltd a good buy now?
Shemaroo Entertainment Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Shemaroo Entertainment Ltd?
Shemaroo Entertainment Ltd revenue growth is -3.9% for FY-2025, which is below its 5-year CAGR of 6.28%, indicating slower growth.

Q.2 Gross Profit margin of Shemaroo Entertainment Ltd?
Shemaroo Entertainment Ltd Gross profit margin which is the profit after deduction of direct costs, is -17.3% for FY-2025, which is below its 5-year median of -3.9%, indicating decreasing margins.

Q.3 Operating Profit Margin of Shemaroo Entertainment Ltd?
Shemaroo Entertainment Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -13.1% for FY-2025, which is below its 5-year median of 4.58% indicating decreasing margins.

Q.4 Net Profit Margin of Shemaroo Entertainment Ltd?
Shemaroo Entertainment Ltd Net Profit Margin is -13.45% for FY-2025, is below its 5-year median of -6.3%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -17.3 -3.9
Operating Profit Margin (%) -13.1 4.58
Net Profit Margin (%) -13.45 -6.3

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Shemaroo Entertainment Ltd?
Shemaroo Entertainment Ltd Return on Asset is -9.58%, which is below its 5-year historical median of -2.19%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Shemaroo Entertainment Ltd?
Shemaroo Entertainment Ltd Return on capital employed is -9.84% for FY-2025, which is below its 5-year historical median of 0.9%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Shemaroo Entertainment Ltd?
Shemaroo Entertainment Ltd Return on equity is -17.19% for FY-2025, which is below its 5-year historical median of -3.26%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Shemaroo Entertainment Ltd?
Shemaroo Entertainment Ltd Cash conversion cycle is 365 days, below its 5-year historical median of 503 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.71 0.56
ROE (%) -17.19 -3.26
ROCE (%) -9.84 0.9
Cash Conversion Cycle 365 days 503 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Shemaroo Entertainment Ltd?
Shemaroo Entertainment Ltd Debt-to-Equity ratio is 0.65, which is above the industry average of 0.06, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Shemaroo Entertainment Ltd?
Shemaroo Entertainment Ltd Debt to cash flow from operations is 4.1, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Shemaroo Entertainment Ltd?

Q.1 Promoter shareholding and pledge status of Shemaroo Entertainment Ltd?
Promoters hold 67.24% of the Shemaroo Entertainment Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Shemaroo Entertainment Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Shemaroo Entertainment Ltd vs industry peers?
Shemaroo Entertainment Ltd revenue CAGR is 6.28%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -3.9 0
Gross Profit Growth (%) 0 5.9
Operating Profit Growth (%) 0 3.8
Net Profit Growth (%) 0 9.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.71 0.1
ROE (%) -17.19 -
ROCE (%) -9.84 0.07
Cash Conversion Cycle (days) 364.87 90

Valuation & price assessment

Q.1 Stock return of Shemaroo Entertainment Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -10.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-10.4% 2.5% -6.8% -1%
Q.2 Valuation ratios of Shemaroo Entertainment Ltd vs historical?
The current P/E ratio of 0 is in line with than its historical median of , indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings - - 28.25
Price to Book 1.03 0.69 1.04
Price to Sales 0.5 0.70 6.25
EV to EBITDA -2.17 14.23 10.21

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