For decades, India’s music catalogues were like untapped oil fields. Labels like Tips spent years acquiring rights — painstakingly, track by track — only to watch their potential choked by piracy, weak copyright enforcement, and telecom bundling that crushed pricing power. Owning a catalogue often meant sitting on an asset earning a trickle of royalties, barely enough to justify the capital invested.
Then came the Jio moment — the single greatest disruption to India’s media and entertainment landscape in decades. Cheap data, mass smartphone adoption, and a cultural shift toward internet consumption turned the industry upside down. And the music sector became one of its biggest beneficiaries.
Streaming has created a business model where music is consumed by people for free, but still generates revenue for the Music Industry. With Digital advertising share at 51% of total Ad-revenues and expected to reach 61% till FY26 the key revenue driver is far from peaking.
Have a look at TIPS MUSIC FINANCIALS
| Particulars | Mar-21 | Mar-22 | Mar-23 | Mar-24 | Mar-25 | CAGR | |
| Sales | ₹ 91 | ₹ 136 | ₹ 187 | ₹ 242 | ₹ 311 | 36% | |
| Operating Profit | ₹ 55 | ₹ 86 | ₹ 102 | ₹ 158 | ₹ 207 | ||
| OPM % | 61% | 64% | 55% | 66% | 67% | ||
| Net Profit | ₹ 43 | ₹ 65 | ₹ 77 | ₹ 127 | ₹ 167 | 40% | |
| NPM % | 47% | 48% | 41% | 52% | 54% | ||
| ROE | 54% | 64% | 75% | 93% | 93% | ||
| FCFE | ₹ 40 | ₹ 30 | ₹ 86 | ₹ 239 | ₹ 136 | ||
| Cum 5 YR OP | ₹ 608 | ||||||
| Cumm 5 YR FCFE | ₹ 531 | ||||||
| FCFE/NET PROFIT | 87% |
India’s Music Industry: Just Scratching the Surface
A 36% revenue jump looks impressive in isolation — but India’s music sector is still in its early innings. Paid subscriptions are projected to double to ~15 million by 2026 and quadruple to 35–40 million within five years. In 2023 alone, subscribers rose from 5 million to 7.5 million (+55% YoY), generating ₹300 crore in subscription revenue within an overall industry of about ₹2,000 crore. Digital already contributes 87% of total music revenue, and growth from both free and premium users should accelerate monetisation.
With Short video platforms will amplify this trend. Indians now spend an average of 4.8 hours per day on mobile apps — with short videos at 37 minutes per user daily, twice as popular in Tier-2 cities. Music is among the top categories consumed, particularly by youth. Although monetisation of short videos is still nascent, platforms such as YouTube are expected to introduce revenue-sharing models soon — a move that could unlock a major new income stream for music rights holders.
Imagine owning a catalogue of 34,000+ songs across multiple genres and languages, with YouTube views compounding at 56% annually over the past five years and a subscriber base of 125.8 million — placing you just behind India’s top two channels.
The scale of this moat is staggering. Even if Bollywood produces ~250 films a year with an average of five songs per film (around 1,000 new songs annually), it would take a newcomer three decades just to match Tips’ existing catalogue size. And replicating it at today’s prices is almost impossible: a single Bollywood track now costs ₹2–3 crore, while a full album can run ₹25–30 crore — rights that Tips acquired in the late ’90s at a fraction of those costs.
The Holy Grail Business Model
Tips Industries today is a ₹300-crore top-line company with a vision of ₹2,000 crore in revenues within a few years — and it can do so with minimal reinvestment. Over the last five years, roughly 87% of operating profit has translated directly into free cash flow to equity, while content acquisition costs have stayed steady, protecting gross margins. Operating leverage should further expand margins as revenue grows.
What’s that worth? With Tips trading at ~45× earnings, the setup offers the “holy grail” for long-term investors — a double engine of growth: both EPS compounding and potential multiple expansion as the business scales and de-risks.
And at this valuation, you’re not just buying a music catalogue; you’re also backing a management team with a proven record of disciplined capital allocation and shareholder friendliness. Where many CEOs would dilute returns chasing growth, Tips has remained frugal, averaging an 80% ROE — one of the rarest feats in Indian equities.
In short, Tips combines a unique, hard-to-replicate asset base with exceptional capital discipline, creating a compounding engine that is still only scratching the surface of its potential.
Consistently rewarding shareholders through Buybacks & Dividends
Tips has created massive wealth for its shareholders, delivering over 300% price appreciation in the past three years. Beyond this stellar performance, the company has consistently enhanced shareholder value by reducing its equity base through buybacks and maintaining a generous distribution policy via both dividends and buybacks. With its strong earnings power and robust free cash flow generation, we believe Tips is well-positioned to sustain this momentum, continuing to reward shareholders and strengthen its business in the years ahead.
