Q3FY21 Result Update - Entertainment Network India - ICICI Direct

Entertainment Network India (ENIL) reported a weak set of Q3FY21 numbers. Revenues came in at Rs. 85.6 crore (down 42.3% YoY) with core radio revenue de-growth of 36% YoY in Q3FY21. The solutions business witnessed 55% decline YoY as on-ground activities are yet to pick up. EBITDA dipped 45.9% YoY to Rs. 20.9 crore. While ENIL managed cost reduction across all fronts, a sharp fall in revenues meant lower operating profit. Exceptional gain of Rs. 29.3 crore was reported owing to reassessment of royalty provisions (Rs. 26.1 crore) and fee received post termination of time brokerage deal with a US broadcaster (Rs. 2.6 crore). Subsequently, reported PAT was at Rs. 18.4 crore, up 85.9% YoY.

Valuation & Outlook

The radio sector remains the worst hit media segment due to Covid-19 led lockdown in FY21E. While seeing ad growth was encouraging, YoY ad pricing drop (improved QoQ in festive quarter) affected revenue. Ad pricing is likely to remain under pressure in the near term, Gross margin growth of solutions business is a relief for ENIL in challenging times and focus on digital going ahead will keep margins heathy. We would monitor the traction, consistency in the same before turning constructive. The company has cash & cash equivalent of ~Rs. 197 crore, which assures liquidity. However, ENIL's payout to shareholders is less compared to its peer. We roll over valuations to FY23E and maintain HOLD rating on the stock with a revised target price of Rs. 185 (implying ~4x FY23E EV/EBITDA) vs. earlier TP of Rs. 145.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_ENIL_Q3FY21.pdf

Shares of ENTERTAINMENT NETWORK (INDIA) LTD. was last trading in BSE at Rs.165.5 as compared to the previous close of Rs. 170.95. The total number of shares traded during the day was 908 in over 127 trades.

The stock hit an intraday high of Rs. 171 and intraday low of 165.5. The net turnover during the day was Rs. 152932.

Source : Equity Bulls

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