Entertainment Network (India) Ltd. share price target

Unlikely to achieve revenue guidance of Rs4bn in FY22. which are at ~33% discount to pre-COVID levels may take time to recover. in legacy/batch-1/batch-2 stations stood at 99.4%/40.5%/30.9% respectively) which is encouraging. While there are headwinds in radio segment as price recovery is a long drawn process, management sounded upbeat on the core...

About the stock: Entertainment Network India (ENIL), a subsidiary of Bennett, Coleman & Company Ltd (BCCL), operates Radio Mirchi which has 73 stations across 63 cities with more than 63 million listeners. Mirchi has been ranked No.1 in all Indian Readership Survey (IRS) surveys...

At the network level, volume was up by 61% while pricing was down by 5%. ~37% discount to pre-COVID levels may take 2-3 years to recover. However, utilization in top-8 markets is at ~79%) which is encouraging. While there are headwinds in radio segment as price recovery is a long drawn process, management sounded upbeat on the core solutions & digital business which...

At the network level, volume was up by 60% while pricing dropped by 5%. ENIL's operational performance (EBITDA loss of Rs187mn) was marred by 2nd wave as recovery process was delayed since radio is an AND medium of advertising. Further, ad-volumes in high yield markets are still at sub-optimal levels which can prolong the recovery. While there are headwinds in radio segment as price recovery is a long drawn process, management sounded upbeat on the core solutions & digital business which is expected to form...

ENIL's bottom-line performance was impacted by an impairment provisioning of Rs975mn as future cash flows of 8 frequencies are likely to be lower than internal hurdle rate amid COVID induced stress. Given the onset of 2nd wave, we believe the recovery process will be delayed as radio is an AND medium of advertising prompting us to cut our FY22E/FY23E EBITDA estimates by...

The radio business continued to report revenue de-growth in Q4FY21 due to pressure on realisation front. We note that ENIL's core radio revenue decline of 27.4% during Q4FY21 was much steep compared to MBL. The company indicated that pricing has started improving gradually as price increase for the quarter was 5% YoY, albeit significantly lower than its peak. We expect pricing recovery to be gradual in nature. Accordingly, we revise our estimates and expect radio revenues CAGR of 45% YoY in FY21-23E on...

Ad volume grows YoY; yield recovery lagging The radio business continued to report revenue de-growth in Q3FY21 as ad pricing dropped. We note that ENIL's core radio revenue decline of 36% in Q3FY21 was lower than the listed competitor in the industry. Radio revenue decline was mainly owing to revenue dip of 45-50% (18% volume dip) in top eight markets. Also, ad pricing was down 28% YoY. The management said pricing recovery lags volume recovery and is expected to reach near normal by August. Accordingly, we revise our estimates and expect radio revenues...

back of Rs267mn pertaining to performance royalty. Management sounded upbeat on the digital solutions business (share is expected to rise to ~20-25% in next 2 years) which shall aid margins (digital solutions have higher GM of...

Sequential improvement; festive season pick up key The radio business continued to report revenue de-growth in Q2FY21 as ad volume as well as pricing remained low. We note that ENIL's core radio revenue decline of 57.1% during Q2FY21 was higher than competitor in the industry. Radio revenue decline was mainly owing to weakness in IT, ecommerce, auto, government, real estate while ad spend from health & pharma, BFI, FMCG sector was better. The management said ad volume trend was varied across the country and states, metros most affected by Covid-19 spread reported sharper de-growth. Ad pricing was down 30% as...

The radio business continued to report revenue de-growth in Q1FY21 following a disappointing FY20. Ad volume took a big hit due to reduced spend by corporate/government during Covid-19 induced lockdown. We note that ENIL's core radio revenue decline in Q1FY21 was higher than competitor in the industry who reported ~79% decline (total revenue trend better for ENIL owing to solutions business). Radio revenue decline was mainly owing to weakness in education (81% down YoY), M&E; (77% down), FMCG (72% down) and other sectors that de-grew 87% while health &...

ENIL's performance was better than our expectations (EBITDA loss of Rs260mn versus our estimate of Rs644mn) on the back of better cost control. While targeted savings of Rs1bn in FY21E is noteworthy, we believe fixed cost absorption will continue to remain a challenge in a weak demand environment (inventory utilization for 35 legacy/17 batch 1/21batch 2 stations...

We have drastically cut our EBITDA estimates for FY21/FY22 as 1) fixed cost absorption will be a challenge in a weak demand environment (inventory utilization for 35 legacy/17 batch 1/21batch 2 stations is expected to be 55%/15%/10% in FY21E) 2) recovery in non-FCT business will be back ended...

The radio business stayed weak throughout FY20 following macroeconomic slowdown and was further accentuated by Covid-19 outbreak in March. We note that ENIL's core radio revenue decline during Q4FY20 was lower than other players in the industry who reported over 40% decline. Radio revenue decline was mainly owing to weakness in government advertisements (~42% down YoY). M&E; and auto sectors' ad spend de-grew 56% and 37%, respectively, while pharma sector ad spend was up 18% YoY. The company indicated ad volumes during lockdown were down 70-80% YoY. Revenues...

Single screens to battle for survival post-COVID Single screens have been facing existential crisis since long. Already fraught with hygiene & maintenance challenges which was hurting footfalls, COVID-...

ENIL's revenues came in at | 115.6 crore, down 5.7% YoY, impacted by core radio revenues that de-grew ~17% YoY while solutions business grew ~34% YoY. Reported EBITDA came in at | 28 crore while margins came in at 24.2%. Adjusted for Ind-AS, EBITDA was at | 17.9 crore, down 34.5% YoY while adjusted margins came in at 15.5%, down 680 bps YoY on account of negative operating leverage. Reported PAT came in lower at | 0.2 crore, impacted by a weak operating performance, lower other income and Ind-AS...

Solution biz safeguards revenue growth albeit at lower profitability: For 1QFY20, ENIL echoed the dismal performance of the media industry in general and the radio industry in particular. Revenue growth of 8.2% YoY (to INR1.4b) garnered crucial support from Non-FCT (Solutions) business (+42% YoY) at a time when Radio segment growth was flattish at 1% YoY. In Radio, increasing cost along with the low 11.6% margin in the 21 new stations of Phase III pushed the segmental EBITDA margin lower to 19% from the historical levels of 25-30%. Moreover, Non-FCT margin remained inherently...

ENIL's Q1FY20 revenue growth of 8.9% YoY was largely led by solutions business (forming 28% of revenues) which grew 42.4% YoY. Radio revenues, on the other hand, were muted with 1.4% YoY growth. EBITDA (excluding Ind-AS 116) came in at | 23.7 crore, a drop of 16.6% YoY, while adjusted margins came in at 17.9%, lower than our expectation of 21.3% given the weakness in the core radio segment. Reported PAT came in lower at | 3.8 crore, impacted by the weak operating performance as well as...

ENIL reported 10.3% YoY revenue growth to | 175.8 crore in Q4FY19. Overall revenue growth for the quarter, was largely aided by non-radio business (grew 26% YoY to | 75.8 crore) while radio revenues were flat at | 100 crore vs. high single digit growth recorded by peers during the quarter). EBITDA growth of 21.8% YoY for the quarter was aided by ~15.8% YoY decline in employee expenses (reversal of provisions pertaining to variable pay, on non-achievement of certain internal targets). EBITDA margins improved 231 bps YoY to 24.5%. PAT increased 64% YoY to | 19.4...