Buy Ent Network Ind; target of Rs 254: ICICIdirect.com

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Buy Ent Network Ind; target of Rs 254: ICICIdirect.com

ICICIdirect.com is bullish on Entertainment Network India (ENIL) and has recommended buy rating on the stock with a target of Rs 254 in its February 7, 2011 research report.

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RELATED NEWS Buy IL&FS Transportation; target of Rs 326: KRChoksey Buy Adhunik Metaliks; target of Rs 150: MLR Securities Buy Lupin; target of Rs 479: Firstcall Research ALSO READ See previous views by ICICIdirect.com See what other Experts & Brokerages are saying about Ent Network Ind See messages about Ent Network Ind Ent Network Ind BSE | NSE 01/06/12 Are Mutual Funds betting on Ent Network Ind?

ICICIdirect.com is bullish on Entertainment Network India (ENIL) and has recommended buy rating on the stock with a target of Rs 254 in its February 7, 2011 research report.

"Entertainment Network India (ENIL) standalone numbers were in line with our expectation with topline at Rs 74.57 crore, growing 17.7% YoY. On a consolidated basis, the company reported a topline of Rs 142.9 crore against our expectation of Rs 110 crore, partly due to inclusion of OOH business financials till December 29, 2011 against our expectation of November 30, 2011. Standalone EBITDA stood at Rs 28.2 crore while the margin was 36.4%, against 33.2% in Q3FY10, aided by a variable royalty regime. ENIL reported standalone PAT of Rs 24.9 crore that included Rs 12.4 crore from sale of its stake in TIM to BCCL. However, on a consolidated level, the company reported a net loss of Rs 5.2 crore due to a loss of Rs 17.9 crore on account of sale of OOH business to BCCL (carrying cost was higher in consolidated books, in line with stake sale to Goldman and Lehman)."

"Growth in radio revenues was encouraging, especially with smaller cites gaining traction. Revenue from the radio business grew 17.7% YoY to Rs 74.6 crore from Rs 63.3 crore in Q3FY10. The company registered an average yield of over Rs 10,000 per 10 second slot across the network. The EBITDA margin in the radio business increased to 36.4% primarily due to a change in the royalty fee structure. Also, margins in the 22 smaller stations increased to 27.0% from 20.4% in Q3FY10."

"We have valued the company on an SOTP basis, evaluating the radio business on DCF and event business on EV/sales. Assuming revenue CAGR of 8.6% over FY11E-FY20E and terminal growth of 4%, thereon, we have arrived at a target price of Rs 254 per share for the radio business. We have valued the event business at 1x FY12 EV/sales to arrive at a valuation of Rs 10.3/share. The stock is currently trading at Rs 214. Our target price implies an upside potential of 19%. We rate the stock as BUY," says ICICIdirect.com research report.

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To read the full report click on the attachment