Sharekhan's research report on Entertainment Network India
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.
Outlook
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.
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