Emkay's report on Entertainment Network India
Revenue at Rs 933mn (+9.4% yoy), EBITDA at Rs 349mn grew 16.7% yoy (5% higher than estimate) with EBITDA margin at 37.4% (+235bps yoy). PAT at Rs 243mn (+22% yoy)
Improvement in utilization continues to drive revenue growth n We expect advt. rate improvement to start reflecting from H2FY15E
The company to accelerate brand investments for future growth. At CMP stock price limits near term upside, maintain HOLD with revised target price of Rs 422 (20x FY16 EPS).
Outlook: "Our long term outlook on the company remains positive given the following reasons- i) immense scope for expansion of radio broadcasting in Phase III, ii) ENIL’s strong balance sheet and free cash generation and iii) company’s strong brand and leadership position in the industry. The company is well funded for Phase III expansion with cash balance of Rs4.64bn and continued cash generation. Key risks include aggressive bids for Phase-III auctions, rise in competitive intensity, adverse regulatory environment, and inability to take ad rate hike. Hold the stock for the target price of Rs 422", says Emkay Global Financial Services research.
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