ENIL market outperformer, target Rs 513: P Lilladher

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ENIL market outperformer, target Rs 513: P Lilladher

Prabhudas Lilladher has maintained market outperformer rating on Entertainment Network with a price target of Rs 513.

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Prabhudas Lilladher has maintained market outperformer rating on Entertainment Network with a price target of Rs 513.

Prabhudas Lilladher research report on Entertainment Network (ENIL)

Entertainment Network (India) (ENIL) with its brand Radio Mirchi is a market leader in the fast growing Indian radio industry. The company through its subsidiary Times Innovative Media Ltd. (TIML) also has presence in the Indian out-of-home (OOH) media and event management businesses. ENIL is currently in its investment phase and ramping up aggressively across all business segments. Its presence in outdoor media segment offers potential upside considering the high margin business coming in from the recently won MIAL and DIAL bids in April 2007. Also, the experimental marketing business under the brand 360º Experience is showing positive traction as the company looks at creating new IPRs. We value ENIL's business at Rs513 per share on SOTP basis. We reiterate our Outperformer rating on the stock.

Highlights 

All 32 stations going live by end-Q2 FY08: Revenues for Radio Mirchi to grow at 42% CAGR over FY07-FY10E. Out-of-home-media revenue from airport properties to kick in: MIAL and DIAL to generate revenue of Rs5bn over FY08-10E. Revenues for outdoor media to have a 116% CAGR over FY07-10E. 

Significant margin expansion:

ENIL's economies of scale, innovative marketing, synergies across business segments coupled with strong group backing will lead to significant improvement in operating margins from 19.7% in FY08 to 22% in FY09 and 26.1% in FY10. 

Valuation:

ENIL will continue to be a leading city-centric media company, catering to local advertisers on a nationwide network. We value ENIL's business at Rs 513 per share on SOTP basis. We re-iterate our Outperformer rating on the stock.