Highlights of the call

• The Company in-principle approved the sale of ENIL's entire equity stake of 83.44% in Times Innovative Media Ltd (TIM) to Bennett, Coleman & Company Ltd (BCCL) for a cash consideration of Rs 45 crore. Additionally, BCCL will repay the Company's loan to TIM of Rs 42.50 crore and also absorb the obligations under the financial guarantees provided by the Company on account of TIM as on the date of the proposed transaction of Rs 31.23 crore.

• The revenues of TIM would not be consolidated from Q2FY2011.

• The gross debt in radio business is Rs 23 crore and cash of Rs 20 crore. Post the sale of TIM business, the cash would increase to about Rs 100 crore. The Company generated cash of Rs 20 crore during the quarter of which the cash generated from delayed payment to creditors was Rs 6 crore.

• For the year, the current tax liability will be nil. The company would have to pay tax as per MAT but the same can be deducted on paying normal tax hence would be kept as deferred tax credit. However, the Company has a deferred tax liability of Rs 6.8 crore of which Rs 2.2 crore has been taken in Q1FY2011 and the balance would be taken in the rest of FY2011.

• The Company wouldn't like to comment on the Phase III currently. It would play a big role in the future growth of the radio industry as and when it is announced.

• As per the recently published Indian Readership Survey (IRS) 2010 Q1, Radio Mirchi has emerged as a clear leader with over 41.2 million listeners across the country. Radio Mirchi tops the charts with the largest cumulative listenership of 15.1 million in the eight key cities of Mumbai, Delhi, Kolkata, Hyderabad, Bangalore, Pune and Ahmedabad. It leads in 25 of its 32 cities across the country.

• As per RAM data, ENIL is the leader in Delhi, Mumbai and Kolkata, whereas in Bangalore it is a close second.

• The revenue market share of ENIL in the private radio industry was down at 36-37% from 39-40%. The reason is due to the players with lower utilizations have been able to fill volumes. In Q1FY2011, the private players recorded growth of 25 – 27%.

• The management expects to see price hike by end August. The management believes that once the capacity is full, the festival season would see pricing improvement. The prices y-o-y are down 25 – 30%. The management expects to recover about 15% of the fall.

• The hearings with regards to music royalty have been completed and the decision should be out in the next 4 – 6 weeks. Management believes that even if the decision goes against the radio players, the royalty payments would not increase. However, there are benefits if the decision goes in favour of radio players.

• Currently, the quarterly royalty payment is about Rs 4 crore i.e. Rs 12.5 lakh per station per quarter. The payment is on fixed basis.

• The new 22 stations would see improvement in margins only if the royalty payment is reduced.

• The utilization levels for the top 10 stations is about 71% up from 66% over the corresponding quarter previous year whereas for remaining 22 stations it is 48% up from 40% over the corresponding quarter previous year and on an overall basis at 55% against 48% in the corresponding quarter previous year. For Q4FY2010, it was 81% for top 10 and 62% on overall basis.The volume growth has been 14.5% on overall basis.

• The pricing was up 4 – 5% on q-o-q basis at Rs 9400 per 10 seconds. The pricing is down 25 – 30% on y-o-y basis.

• For the quarter ended June 2010, for radio business, net sales grew 15% at Rs 57.53 crore with OPM up 670bps at 25.1% and PAT was at Rs 4.31 crore against loss of Rs 1.45 crore in the corresponding quarter previous year.

• Out of the revenues of Rs 57.53 crore, the 10 legacy stations grew 13% on y-o-y basis at Rs 41.55 crore and down 9% on q-o-q basis. EBITDA margins stood at 30.8% against 26.8% in the corresponding quarter previous year and 32% in the sequential quarter. The 22 new stations had revenues of Rs 15.98 crore up 18% on y-o-y basis and up 4% on q-o-q basis with OPM at 10.4% against loss of Rs 0.60 crore in the corresponding quarter previous year and 6.2% in the sequential quarter.

• On standalone basis, the revenue from private treaty were at Rs 2.85 crore and provision against private treaty was Rs 2.24 crore.

Event management business

• For the quarter, event management business reported revenues of Rs 11.53 crore up 71% with loss at operating level of Rs 0.26 crore down 85% and loss at net level of Rs 0.3 crore down 82%.

• The Company had 7 IPRs originally of which only 4 could be monetized in FY2010. The Company plans to revive the 3 which lapsed last year and add 2 more IPRs in the current year taking the total IPRs to 9 by the end of the year.