ENIL - Best placed for Phase III auctions... - ICICIdirect

Entertainment Network India (ENIL) reported its Q3FY13 numbers, which were in line with our estimates. The company reported a standalone topline of Rs. 87.4 crore (I-direct estimate - Rs. 84.8 crore), growing 15.6% YoY spurred on by ad growth of 17.6% YoY. The ad revenue benefited from the Gujarat elections, which contributed ~25% of ad revenue from Gujarat.

Margins came in line with our estimates at 34.5% contracting 652 bps YoY largely due to increasing contribution from activation business which is a low margin business. EBITDA stood at Rs. 30.2 crore vs. our estimate of Rs. 29.2 crore. The PAT came in at Rs. 18.7 crore, slightly better than our estimate of Rs. 17.2 crore. The utilisation rate for the quarter stood at 84%, improving sharply from 69% in Q3FY12.

The management indicated that the announcement of phase III auctions could come very shortly. ENIL, being the market leader, and with strong cash on its books, is best placed to grab the growth opportunity brought about by Phase III auctions.

We have introduced FY15E EPS at Rs. 16.5. We maintain our DCF based target price of Rs. 266 with BUY rating.

Source : Equity Bulls

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