Name: Latest research reports of Entertainment Network (India) Ltd. authored by Motilal Oswal and published by - Trendlyne research reports.
Item: Entertainment Network (India) Ltd.
Rating: 5
Author: Motilal Oswal

Entertainment Network India: Ad recovery on the cards

Buy: Entertainment Network (Ind...

Recommendation

Motilal Oswal

Ad revenue was muted in October 2017 due to an early festive season (in 2QFY18), subdued Gujarat election ad spends, and lingering GST impact. However, we see a revival in November-December 2017 on (1) a low base of November 2016, and (2) the just-launched Karan Johar show. New stations (batch-1 of phase-3), which contribute 11 % of revenue, should break even by 4QFY18, with capacity utilization rising from 23 % to 25-30 %. ENIL is likely to spend INR3b in FY19 towards (a) the acquisition of TV Today's Delhi, Mumbai and Kolkata frequencies, and (b) the next batch of phase-3 auctions. We expect new stations from TV Today to generate annual revenue of INR700m-800m in 2-3 years, up from the current INR300m. We expect 14 % revenue growth in 3Q. For FY18, we estimate 4 % revenue growth; breakeven of new station should drive 15 % EBITDA growth. Over FY17-20, we estimate 15 % revenue CAGR and 29 % EBITDA CAGR.