Entertainment Network India - Result Update - ICICI Securities

Entertainment Network India (ENIL) reported a weak set of Q4FY20 numbers. Revenues came in at Rs. 151.8 crore (down 13.6% YoY) with core radio revenue de-growth of ~16% YoY in Q4FY20. The solutions business witnessed 12% YoY decline in revenues. Reported EBITDA came in at Rs. 23 crore while margins came in at 15.1%. Adjusted for Ind-AS, like to like EBITDA came in at ~Rs. 14 crore, drop of ~67% YoY, while adjusted margins were at ~9%. Weaker topline and high employee expenses resulted in EBITDA decline. Subsequently, the company reported a net loss of Rs. 3.2 crore against net profit of Rs. 19.4 crore in Q4FY19.

Valuation & Outlook

The radio sector remains the worst hit media segment with dual pain of macroeconomic headwinds and sharp decline in ad spending by government and corporates. The scaling up and gross margins growth of Solutions business is a relief for ENIL in challenging times. We would monitor the traction, consistency in the same before turning constructive. The company has cash & cash equivalents of ~Rs. 228 crore, which assures liquidity. Recovery in radio ad growth is key for overall rerating of the stock. We believe weakness in ad revenue will persist till H1FY21E considering the extended lockdown. Hence, we maintain our HOLD rating on the stock with a revised target price of Rs. 180 (implying ~4x FY22E EV/EBITDA).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_ENIL_Q4FY20.pdf

Shares of ENTERTAINMENT NETWORK (INDIA) LTD. was last trading in BSE at Rs.160 as compared to the previous close of Rs. 166.4. The total number of shares traded during the day was 908 in over 76 trades.

The stock hit an intraday high of Rs. 168.9 and intraday low of 158.3. The net turnover during the day was Rs. 147316.

Source : Equity Bulls

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