Hold Entertainment Network India; target of Rs 270: ICICI Direct

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.

Outlook

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.