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B e t t e r u t i l i s a t i o n ; c h a l l e n g i n g t i m e s a h e a d . . .
Entertainment Network Ltd (ENIL) reported its Q2FY12 numbers, which
were in line with our expectations on the topline front. The consolidated
topline for the company stood at | 70.1 crore against our expectation of |
74.6 crore. YoY comparisons are not prudent for consolidated numbers
as the company has hived off its outdoor business. The standalone
topline stood at | 69.2 crore, growing 10.1% YoY on the back of 11.9% ad
revenue growth, which can be attributed to higher utilisation. The
blended capacity utilisation stood at 65.3% against 58.0% in Q2FY11.
ENIL reported standalone EBITDA of | 18.4 crore with an EBITDA margin
of 26.5%. The consolidated EBITDA margin stood at 24.8%. The company
reported standalone PAT of | 9.0 crore growing 80.2% YoY. The
consolidated profit stood at | 8.3 crore.
Highlights of the quarter
Ad revenue growth in this quarter was better than the previous quarter in
spite of it being a seasonally weak quarter. The radio business exhibited a
growth of 11.9% YoY in Q2FY12 in a challenging environment. The
blended utilisation level showed an increase from 58.0% in Q2FY11 to ~
65.3% in this quarter. The EBITDA margin in the radio business improved
152 bps to 26.5% from 25.0% in Q2FY11, in spite of higher marketing
expenses in this quarter, due to higher capacity utilisation.
V a l u a t i o n
We have valued the stock on an SOTP basis, evaluating the radio
business on DCF and event business on EV/sales. Assuming revenue
CAGR of 12.7% over FY11E-FY20E and terminal growth of 4%, thereon,
we have arrived at a target price of | 288/share for the radio business. We
have valued the event business at 1.0x FY13 EV/sales to arrive at a
valuation of | 2.2/share. The stock is currently trading at | 254. Our target
price implies an upside potential of 15%. We maintain our BUY rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
B e t t e r u t i l i s a t i o n ; c h a l l e n g i n g t i m e s a h e a d . . .
Entertainment Network Ltd (ENIL) reported its Q2FY12 numbers, which
were in line with our expectations on the topline front. The consolidated
topline for the company stood at | 70.1 crore against our expectation of |
74.6 crore. YoY comparisons are not prudent for consolidated numbers
as the company has hived off its outdoor business. The standalone
topline stood at | 69.2 crore, growing 10.1% YoY on the back of 11.9% ad
revenue growth, which can be attributed to higher utilisation. The
blended capacity utilisation stood at 65.3% against 58.0% in Q2FY11.
ENIL reported standalone EBITDA of | 18.4 crore with an EBITDA margin
of 26.5%. The consolidated EBITDA margin stood at 24.8%. The company
reported standalone PAT of | 9.0 crore growing 80.2% YoY. The
consolidated profit stood at | 8.3 crore.
Highlights of the quarter
Ad revenue growth in this quarter was better than the previous quarter in
spite of it being a seasonally weak quarter. The radio business exhibited a
growth of 11.9% YoY in Q2FY12 in a challenging environment. The
blended utilisation level showed an increase from 58.0% in Q2FY11 to ~
65.3% in this quarter. The EBITDA margin in the radio business improved
152 bps to 26.5% from 25.0% in Q2FY11, in spite of higher marketing
expenses in this quarter, due to higher capacity utilisation.
V a l u a t i o n
We have valued the stock on an SOTP basis, evaluating the radio
business on DCF and event business on EV/sales. Assuming revenue
CAGR of 12.7% over FY11E-FY20E and terminal growth of 4%, thereon,
we have arrived at a target price of | 288/share for the radio business. We
have valued the event business at 1.0x FY13 EV/sales to arrive at a
valuation of | 2.2/share. The stock is currently trading at | 254. Our target
price implies an upside potential of 15%. We maintain our BUY rating.
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