ICICI Direct recommended hold rating on Entertainment Network India with a target price of Rs 270 in its research report dated November 14, 2019.
ICICI Direct's research report on Entertainment Network India
ENIL’s revenues came in at Rs 115.6 crore, down 5.7% YoY, impacted by core radio revenues that de-grew ~17% YoY while solutions business grew ~34% YoY. Reported EBITDA came in at Rs 28 crore while margins came in at 24.2%. Adjusted for Ind-AS, EBITDA was at Rs 17.9 crore, down 34.5% YoY while adjusted margins came in at 15.5%, down 680 bps YoY on account of negative operating leverage. Reported PAT came in lower at Rs 0.2 crore, impacted by a weak operating performance, lower other income and Ind-AS impact. Without Ind-AS 116, PAT would have been Rs 2.9 crore.
Hence, we maintain our HOLD rating with a revised DCF based target price of Rs 270, (implying ~6x FY21E EV/EBITDA). The target price cut is on account of weakness in revenues and earnings.
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