Tips Industries' stock delivers 14,316% return in a decade
In last 10 years, Tips Industries, an entertainment company, has seen its stock price skyrocket from Rs. 3.60 apiece to Rs. 519, providing shareholders with a 14,316% return. This means if you invested Rs. 10,000 initially, it would have grown to Rs. 14.40 lakh. The company's shares experienced 47% increase in 2019, a 252% surge in 2020, and 487% return in 2021. It dipped 5.44% in 2022 but recovered 93% in 2023 and has maintained 52% in 2024 so far.
Ventura Securities gives 'buy' rating
Ventura Securities, a domestic brokerage firm, has given Tips Industries' stock a 'buy' rating and set a target price of Rs. 612 per share. The brokerage cites the booming Indian music industry and Tips' all-encompassing approach to content creation as reasons for its positive outlook. Tips boasts an impressive library of 30,000 songs and a substantial subscriber base of 63.1 million on YouTube, compared to rival Saregama's 1,50,000 songs and 38.9 million subscribers.
Subscription-based models getting popular
Ventura Securities points out that subscription-based models are becoming increasingly popular among streaming platforms. The brokerage highlights Spotify's 40% premium subscriber base, which contributes 90% to its revenue, compared to the 10% contributed by the 60% of free subscribers. The shift toward premium subscriptions suggests that music labels like Tips Industries have the potential to significantly boost their earnings beyond the usual Rs. 0.1 per stream.
Financial outlook for Tips Industries
The brokerage firm predicts that Tips Industries' revenues will grow at a compound annual growth rate (CAGR) of 27.4%, reaching Rs. 386 crore by 2026. It also forecasts EBITDA to grow at a CAGR of 35.6%, reaching Rs. 256 crore, with margins of 66.3% by the same period. Furthermore, net earnings are expected to jump from Rs. 76.5 crore in FY23 to Rs. 196.5 crore, with margins of 50.9%.
