Buy ENIL; target of Rs 490: ICICIdirect

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26 Aug, 2025 12:21

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ICICIdirect.com`s research report on Entertainment Network India“ENIL reported 9.4% YoY revenue growth to Rs 93.3 crore in line with our estimates, led by higher utilisation level of 98%, up from 92.3% in Q1FY14, and realisation of Rs 247 per slot per station, up 2.6% YoY on the back of increased election spending. EBITDA came in at Rs 34.9 crore vs. our expectations of Rs 32.4 crore, led by higher realisation and lower-than-expected increase in employee cost. EBITDA margin stood at 37.4%, up 236 bps YoY. PAT was at Rs 24.4 crore (vs. estimate of Rs 21.5 crore), up 21.5% YoY.” “ENIL, a dominant player in the radio industry with a portfolio of 32 stations across cities, is poised to benefit from this exponential growth in the radio industry. As per Ficci KPMG report 2014, radio industry is expected to see stellar growth of about 18.1% CAGR in FY13-18E from Rs 1460 crore at the end of FY13 to about Rs 3360 crore by FY18E. The growth in the radio industry would primarily stem from its wide reach and as it is the most economical mode of advertising. Moreover, the higher ad rates in the TV segment due to the Trai ad cap would further hasten the shift towards radio advertising. We expect revenues for ENIL to grow at 13.9% CAGR in FY14-16E to Rs 499.5 crore by FY16E from Rs 384.8 crore in FY14. The designated ad time of 13 minutes per hour is already exhausted at blended utilisation of 98% and an average utilisation of 110% across its top 8 stations. The revenue has, therefore, primarily been driven either by an improvement in yield or higher ad minutes per hour. We expect the trend to continue till Phase III auctions takes place. The company is also trying several innovative measures such as creating new prime time slots to build up its inventory.” “ENIL is expected to maintain its robust growth rate witnessing revenue and PAT growth of 13.9% and 18.2% CAGR, respectively, in FY14-16E. Phase III will lead to an increase in capacity of radio players while the revenue growth would be a mix of volume and yield. Also, clarity in terms of license extension of Phase II frequencies provides stability to operations. We rate ENIL as BUY, valuing it at 20x FY16E EPS of Rs 24.5, at a target price of Rs 490,” says ICICIdirect.com research report.

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