Result Update: Entertainment Network (India) Ltd)- REDUCE - TP Rs.770 - Kotak

ENIL's 4QFY17 revenues came in higher than our estimates, aided by higher revenues from non-radio operations, as well as strong growth in new stations, during the quarter. However, costs came in higher than expected (partly on account of higher mix of non-radio operations), leading to miss on EBITDA/ PAT lines. We build in 16%/15% revenue growth for the company in FY18/FY19, along with significant margin expansion, leading to 50% CAGR in earnings through FY17-FY19E. Given high convergence of our FY19 margin estimates with historical highs for ENIL margins (31.6%, versus 33%), we believe 30XFY19E PER values the stock adequately (Rs 770). We value ENIL at 30XFY19E PER, or Rs 770 (up from Rs 690 earlier, as we roll-forward valuation to FY19). Upgrade a notch to REDUCE as earnings momentum is likely to turn favorable while valuations remain rich.

Shares of ENTERTAINMENT NETWORK (INDIA) LTD. was last trading in BSE at Rs.755 as compared to the previous close of Rs. 748. The total number of shares traded during the day was 338 in over 21 trades.

The stock hit an intraday high of Rs. 760 and intraday low of 750. The net turnover during the day was Rs. 255498.

Source : Equity Bulls

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