Shemaroo Entertainment Limited Downgrades Credit Rating
Shemaroo Entertainment Limited’s long-term bank facilities have been downgraded by CARE Ratings Limited from CARE BB; Stable to CARE BB-; Stable, according to a press release dated March 24, 2026. The amount for the long-term bank facilities was reduced from ₹215.00 crore to ₹195.90 crore.The downgrade reflects a moderation in the company’s operating and financial performance, coupled with continued uncertainty regarding its ability to generate adequate cash flow to meet debt repayment obligations.
Financial Performance
Shemaroo Entertainment Limited’s consolidated revenue from operations declined by approximately 11% year-over-year to ₹455 crore in the nine-month fiscal year 2025. This decrease is attributed to slower-than-expected traction in the syndication business and industry headwinds related to lower advertising expenditure. Accelerated inventory amortization of ₹30-40 crore per quarter from the fourth quarter of fiscal year 2024 resulted in operating and net losses in fiscal year 2025.Here's a summary of the company's financials:
Consolidated Financials (₹ crore)
| March 31, 2024 | March 31, 2025 | December 31, 2025 | |
|---|---|---|---|
| Total operating income | 708.43 | 686.26 | 416.55 |
| PBILDT | 0.84 | -76.54 | -175.93 |
| PAT | -40.67 | -84.96 | -148.94 |
| Overall gearing (x) | 0.62 | 0.65 | N/A |
| Interest coverage (x) | 0.02 | -2.09 | -7.94 |
Standalone Financials (₹ crore)
| March 31, 2024 | March 31, 2025 | December 31, 2025 | |
|---|---|---|---|
| Total operating income | 678.20 | 651.61 | 422.21 |
| PBILDT | -0.98 | -82.05 | -172.69 |
| Profit after tax (PAT) | -42.63 | -87.50 | -146.50 |
| Overall gearing (x) | 0.61 | 0.65 | N/A |
| Interest coverage (x) | -0.03 | -2.25 | -7.74 |
Rating Sensitivities
Positive Factors:- Substantial growth in scale of operations with improvement in PBILDT margin to above 5% on a sustained basis.
- Favorable resolution of pending regulatory matters with no material financial impact.
- Improvement in coverage indicators with PBILDT interest coverage above 1.8x on a sustained basis.
Negative Factors:
- Decline in scale of operations below ₹400 crore with continued cash losses.
- Adverse regulatory actions or crystallization of contingent liabilities impacting liquidity.
- Deterioration in overall gearing above 1.5x.
CARE Ratings notes the company has contingent liabilities of approximately ₹133.61 crore, including ₹70.26 crore in input tax credit. The company intends to seek legal remedies.
The rating agency also noted the clearance of the Joint Managing Director, Chief Executive Officer and Chief Financial Officer from additional penalty of ₹133.61 crore each.
The stable outlook reflects CARE Ratings' view that the company is likely to maintain a moderate financial risk profile over the near term.
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