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B e l o w e s t i m a t e s , b u t l o o k s p r o m i s i n g …
Entertainment Network Limited (ENIL) reported its Q1FY12 numbers that
were below our expectations. The consolidated topline for the company
stood at | 68.7 crore against our expectation of | 82.1 crore, de-growing
40.3% YoY. The standalone topline stood at | 63.2 crore, growing 9.8%
YoY on the back of 7.7% ad revenue growth, which can be attributed to a
higher ad rate charged. The blended capacity utilisation stood at 55.2%
against 54.8% in Q1FY11. ENIL reported standalone EBITDA of | 18.5
crore with an EBITDA margin of 29.19%. The consolidated EBITDA
margin stood at 26.3%. The company reported standalone PAT of | 9.7
crore growing 124.1% YoY. The consolidated profit stood at | 9.3 crore.
ƒ Highlights for the quarter
The quarter was marked by a lower-than-expected topline. The radio
business exhibited a low growth of 9.8% YoY in Q1FY12 as most
companies that overspent on ads in Q4FY11 owing to the World
Cup, chose to cut their ad spend in this quarter. The blended
utilisation level increased marginally from 54.8% in Q1FY11 to
approximately 55.2% in this quarter. The company registered an
average yield of about | 9347 per 10 second slot across the network.
The EBITDA margin in the radio business increased to 29.2% from
25.2% in Q1FY11 primarily due to stringent cost cutting measures
taken by the company.
V a l u a t i o n
We have valued ENIL on an SOTP basis, evaluating the radio business on
DCF and event business on EV/sales. Assuming revenue CAGR of 12.3%
over FY11E–FY20E and terminal growth of 4%, thereon, we have arrived
at a target price of | 286/share for the radio business. We have valued the
event business at 1x FY13 EV/sales to arrive at a valuation of | 10.1/share.
The stock is currently trading at | 257. Our target price implies an upside
potential of 15%. We continue to rate the stock as BUY
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
B e l o w e s t i m a t e s , b u t l o o k s p r o m i s i n g …
Entertainment Network Limited (ENIL) reported its Q1FY12 numbers that
were below our expectations. The consolidated topline for the company
stood at | 68.7 crore against our expectation of | 82.1 crore, de-growing
40.3% YoY. The standalone topline stood at | 63.2 crore, growing 9.8%
YoY on the back of 7.7% ad revenue growth, which can be attributed to a
higher ad rate charged. The blended capacity utilisation stood at 55.2%
against 54.8% in Q1FY11. ENIL reported standalone EBITDA of | 18.5
crore with an EBITDA margin of 29.19%. The consolidated EBITDA
margin stood at 26.3%. The company reported standalone PAT of | 9.7
crore growing 124.1% YoY. The consolidated profit stood at | 9.3 crore.
ƒ Highlights for the quarter
The quarter was marked by a lower-than-expected topline. The radio
business exhibited a low growth of 9.8% YoY in Q1FY12 as most
companies that overspent on ads in Q4FY11 owing to the World
Cup, chose to cut their ad spend in this quarter. The blended
utilisation level increased marginally from 54.8% in Q1FY11 to
approximately 55.2% in this quarter. The company registered an
average yield of about | 9347 per 10 second slot across the network.
The EBITDA margin in the radio business increased to 29.2% from
25.2% in Q1FY11 primarily due to stringent cost cutting measures
taken by the company.
V a l u a t i o n
We have valued ENIL on an SOTP basis, evaluating the radio business on
DCF and event business on EV/sales. Assuming revenue CAGR of 12.3%
over FY11E–FY20E and terminal growth of 4%, thereon, we have arrived
at a target price of | 286/share for the radio business. We have valued the
event business at 1x FY13 EV/sales to arrive at a valuation of | 10.1/share.
The stock is currently trading at | 257. Our target price implies an upside
potential of 15%. We continue to rate the stock as BUY
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