Entertainment Network India (ENIL) has posted good set of numbers in its third quarter with net profit rising 27 percent and net sales increasing 19 percent.
Discussing the earnings, Prashant Panday, MD & CEO of ENIL, said the bulk of growth has come from the radio business, which contributed nearly 80 percent to overall revenue. The radio revenue growth for the quarter stood at 15.5 percent.
The company’s television property business and multimedia solution have been doing well, he said, adding that there has been a slight dip in margins on account of higher expenditure towards marketing cost. Blended utilization stood at 110 percent this quarter, Panday added.
According to him, the third quarter is usually the busiest and the company may see some dip in numbers in the fourth quarter. There could also be some curtailment in expansion plans, he added.
Below is the transcript of Prashant Panday's interview with Latha Venkatesh & Reema Tendulkar on CNBC-TV18.
Reema: Can you breakup your revenue growth of 19 percent. What was the ad growth this quarter, what was the revenue growth in radio as well as in non-radio?
A: The bulk of the growth has come from radio which is interesting because that is the highest profit margin business for us. The radio revenues have grown by about 15-15.5 percent out of that 19 percent growth that we have reported and the radio growth represents the fact that the economy is still struggling because as the economy struggles certain segments of the advertisers spend more on promotions and benefit radio a lot more.
In non-radio, there are certain parts which have been doing well for instance we have been building on our television properties business and that has been doing well. We are also a company which provides a lot of solutions to our clients, a business that we call a multimedia solution – that’s been doing well. So there are segments which are doing well, which take the overall growth up to 19 percent.
Latha: You said that radio is your high margin business. There is a marginal dip in your margins, so some higher expenditure?A: Yes, we have been investing heavily and I have been maintaining that over the last two-three quarters that we will be spending more on marketing. We are spending more on payroll because we are building up a team for the next phase which is around the corner and you might have seen marketing campaigns in Mumbai but we have done in Delhi and Bangalore as well.
Reema: What was the blended utilisation in the previous quarter because in your last interaction you indicated that’s what driving the topline growth?A: It is and it continues to be the reason for the growth in Q3, in fact the blended utilisation is about 110 percent. However, not to forget that this is the busiest quarter, it can only get lesser from this point on, so we think in Q4 the utilisation may remain at about 110 or even dip a bit.Latha: You said there are expansions you are planning for, what is the money that you have put in and where do you see them fructifying. How good is FY16?A: We have a lot of money on the balance sheet, Rs 525 crore plus and by the time the auctions happens the number will only grow. We are also very clear about our strategy; we want to expand, we want to expand in the major metros with the second frequency, we want to expand geographically but there has been a bit of a setback because the government’s info memo which came out on phase three auctions actually put 15 percent limit which was to apply nationally and at the end of phase three, at the end of the first batch now, which means that there will be certain amount of curtailment in our expansion plans temporarily and then it will pick up again in the second batch. So that is what it is.
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