Shares of Entertainment Network (India) soared 14% to Rs 214.75 on BSE in Thursday’s intraday trading thanks to heavy volumes. Shares in the company, which operates Indian FM radio channel Radio Mirchi, traded near its 52-week high of Rs 226.95 hit on August 2, 2021.
For the October to December quarter (Q3FY22), ENIL had reported a 70% year-on-year (YoY) increase in its earnings before interest, taxes, depreciation and amortization (Ebitda) to Rs 35.6 crore on strict cost control measures. The company recorded a profit after tax (PAT) of Rs 11 crore against a loss of Rs 2.7 crore in Q3FY21. Revenue grew by 17% year-on-year to Rs. 98.9 crore, driven by a 23% growth in core FM radio revenue.
So far in March, the stock has outperformed the market jumping 21% after CRISIL Ratings reaffirmed its ‘CRISIL AA+/Stable/CRISIL A1+’ ratings on bank facilities and debt programs of Rs 350 crore of ENIL. The S&P BSE Sensex was down 1.8% over the period.
“The ratings continue to reflect the sequential improvement in revenue in the second and third quarters of fiscal 2022 as radio ad (advertisement) volumes increased. Ebitda improved to 35.6 crore of rupees in the third quarter compared to a loss of 18.7 crores suffered in the second quarter due to strict cost control measures and improved advertising volumes,” CRISIL said in its rationale.
However, the company is launching Mirchi Digital Platform in both international and domestic markets, which will weaken Ebitda margin in FY2023.
CRISIL added: The ratings also continue to reflect ENIL’s market leadership in the FM broadcasting industry, a comfortable financial risk profile backed by strong liquidity and the support of parent company, Bennett Coleman and Company Ltd. (BCCL). These strengths are partially offset by a heavy reliance on advertising revenue and exposure to intense competition.