Entertainment Network India - Q2FY21 Result Update - ICICI Direct

Entertainment Network India (ENIL) reported a weak set of Q2FY21 numbers. Revenues came in at Rs. 48.4 crore (down 58.1% YoY) with core radio revenue de-growth of ~57% YoY in Q2FY21. The solutions business witnessed 62.5% YoY decline in revenues. Reported EBITDA loss came in at Rs. 6.3 crore against EBITDA of Rs. 28 crore in Q2FY20. Although ENIL managed cost reduction across all fronts, significant fall in revenues led to operating loss. Net loss was at Rs. 24.8 crore against net profit of Rs. 20 lakh in Q2FY20.

Valuation & Outlook

The radio sector remains the worst hit media segment due to Covid-19 led lockdown in FY21E. While sequential ad growth was witnessed during Q2, current ad revenue is still well below pre-Covid level. The gross margin growth of solutions business is a relief for ENIL in challenging times. We would monitor the traction, consistency in the same before turning constructive. ENIL's payout to shareholders is also less compared to its peer. The company has cash & cash equivalents of ~Rs. 241 crore, which assures liquidity. However, a sharp recovery in ad volume as well as ad yield will be important during the current festive season, which holds the key for overall rerating of the stock. We believe full ad recovery is still a couple of quarters away. Hence, we maintain our HOLD rating on the stock with a target price of Rs. 145 (implying ~4x FY22E EV/EBITDA).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_ENIL_Q2FY21.pdf

Shares of ENTERTAINMENT NETWORK (INDIA) LTD. was last trading in BSE at Rs.148.55 as compared to the previous close of Rs. 143.6. The total number of shares traded during the day was 153 in over 14 trades.

The stock hit an intraday high of Rs. 149.9 and intraday low of 143.1. The net turnover during the day was Rs. 22703.

Source : Equity Bulls

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