Company Overview

Shemaroo Entertainment Limited, a 60-year-old media company with one of India's largest content libraries (3,042 titles), reported significantly worsened financial performance for FY26 amid ongoing GST litigation and strategic business shifts.

Financial Performance

Consolidated Results: Net loss widened to ₹21.86 crore (₹218.6 million) from ₹8.50 crore in FY25, while revenue declined 15.9% to ₹58.31 crore from ₹69.35 crore. Total expenses reduced to ₹88.39 crore from ₹92.21 crore.

Standalone Results: Net loss of ₹221.6 million on revenue of ₹553.7 million, with digital revenue growing 9% to ₹274.7 million while traditional revenue declined 29% to ₹308.4 million. Key ratios deteriorated significantly with debt-equity ratio rising to 1.13 from 0.64 and return on net worth at -104.0%.

Business Segments

Digital Business: Maintained strong performance with 300 million monthly active viewers, 100+ YouTube channels generating 100 million daily views, and 5.6 billion minutes annual watch time (35% YoY growth). ShemarooMe subscribers grew 30%+, and the company acquired OHO Gujarati content library while entering Hindi originals.

Traditional Business: Broadcasting portfolio of 4 channels (Shemaroo TV, Umang, Josh, MarathiBana) reached 280 million monthly viewers but faced 28.8% revenue decline. Maintained 95% market share in global in-flight entertainment through Shemaroo Contentino.

Corporate Actions & Financing

  • Preferential Allotment: Issued 1,410,000 equity shares at ₹110 per share to promoters, raising ₹15.51 crore to adjust existing unsecured debt
  • ESOP Grants: Granted 599,485 options under employee stock option scheme with ₹2.07 crore expense
  • Acquisition: Acquired 100% control of Aikyam Entertainment Private Limited, resulting in ₹2.89 crore goodwill

Regulatory & Legal Matters

Major GST Dispute: Facing potential liabilities of ₹204 crore including:

  • ₹70.26 crore demand for inadmissible Input Tax Credit
  • Penalties totaling ₹196.96 crore on company and ₹133.61 crore each on key management personnel
  • Bombay High Court granted interim relief, directing no further action pending resolution
  • Matter referred to Larger Bench after appeal disposed in department's favor

Corporate Governance

Board Changes: Raman Maroo reappointed as Chairman & MD, Atul Maru as Joint MD, and Hiren Gada as Whole Time Director & CEO for 3 years from January 1, 2026. Amit Haria resigned as CFO, replaced by Ashish Gupta.

AGM Details: 21st Annual General Meeting scheduled for August 14, 2026, virtually with e-voting from August 10-13, 2026.

Financial Position

Total assets declined to ₹68.58 crore from ₹86.61 crore, with inventories (media content) at ₹33.91 crore, trade receivables of ₹6.94 crore, and cash equivalents of ₹3.51 crore. Total borrowings stood at ₹30.06 crore with total equity of ₹26.72 crore.

Outlook & Challenges

The company faces significant headwinds from the GST dispute resolution, continued pressure on traditional media revenues, and need for digital business scalability to return to profitability. The preferential allotment provides some debt relief but dilutes equity. Auditor highlighted key audit matters around copyright valuation and revenue recognition complexity.