For FY2010, ENIL reported 1% dip in operating revenues at Rs 422.82 crore with radio business reporting 1% rise in operating revenues at Rs 230.85 crore, OOH business reporting 5% rise at Rs 156.11 crore and event business a fall of 27% at Rs 41.52 crore. The company turned profitable at operating level with profit of Rs 44.48 crore against loss of Rs 9.53 crore in the previous year. The loss at net level was down 75% at Rs 15.32 crore.

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.

Quarterly Analysis (Consolidated)

For the quarter ended March 2010, ENIL reported 22% rise in operating revenues at Rs 120.29 crore. Revenues from radio business grew 22% at Rs 61.17 crore, OOH revenues grew 51% at Rs 45.96 crore and event management business revenues were down 23% at Rs 17.37 crore.

The Company turned profitable at operating level with profits of Rs 34.16 core against loss of Rs 12.49 crore in the corresponding quarter previous year. As a % of net sales, production costs were down 870bps at 15%, license fees were down 2380bps at 17.6%, and other expenditure decreased 1070bps at 20.1% whereas marketing expenses increased 220bps at 3.8% and employee cost increased 10bps at 15.1%.

Radio business reported fall in OPM of 250bps at 24.2% whereas OOH business reported profits of Rs 16.48 crore against loss of Rs 28.53 crore in the corresponding quarter previous year and event business reported loss of Rs 14.73 crore down 75%. The margins were impacted by private treaty provisioning of Rs 4.81 crore. The margins for OOH business were benefited by write back of license fees of about Rs 10 crore on re-negotiation of airport properties.

Other income for the quarter was down 80% at Rs 35 lakh. Interest cost (net) decreased 20% at Rs 2.84 crore and depreciation & amortization decreased 11% at Rs 11.85 crore on the back of 18% decrease in depreciation at Rs 6.30 crore. The resultant PBT was at Rs 19.82 crore against loss of Rs 27.56 crore in the corresponding quarter previous year. Tax provision including FBT and deferred tax was up 87% at Rs 2.76 crore. The resultant PAT stood at Rs 17.07 crore against loss of Rs 29.03 crore in the corresponding quarter previous year. Accounting for minority share in profit of TIM of Rs 1.65 crore against share of loss of Rs 5.63 crore in the corresponding quarter previous year, the resultant net profit was at Rs 15.42 crore against loss of Rs 23.40 crore in the corresponding quarter previous year.

FY2010 Performance (Consolidated)

For the year ended March 2010, ENIL reported 1% fall in operating revenues at Rs 422.82 crore. The revenues from radio business was up 1% at Rs 230.85 crore. The revenues from OOH business were up 5% at Rs 156.11 crore and of event business was down 27% at Rs 41.52 crore.

The Company turned profitable at operating level with profits of Rs 44.48 core against loss of Rs 9.53 crore in the previous year. As a % of operating revenues, production expenses decreased 180bps at 13.4%, license fees were down 850bps at 31.1%, marketing expenses decreased 50bps at 4.6%, and employee costs decreased 200bps at 16.1% whereas other expenditure was stable at 24.2%.

Radio business reported improvement in OPM of 370bps at 25.8% whereas OOH business reported 75% fall in operating losses at Rs 14.73 crore and event business reported loss of Rs 0.43 crore against a profit of Rs 0.73 crore in the previous year. The margins were adversely impacted by provisioning for private treaty of Rs 20.01 crore whereas benefited by lower license fees of Rs 10 crore.

Other Income stood at Rs 0.72 crore down 79%, and interest cost (net) decreased 16% at Rs 12.12 crore on lower net debt at Rs 27.67 crore against Rs 131.87 crore at the end of the previous year. Depreciation & amortization charge was flat at Rs 52.56 crore. Loss at PBT level was down 73% at Rs 19.48 crore. Tax provision including deferred tax was at Rs 2.30 crore against tax credit of Rs 0.25 crore in the previous year. Loss of PAT level was down 70% at Rs 21.78 crore. Accounting for minority share in loss of TIM of Rs 6.46 crore down 49%, the resultant loss at net level was at Rs 15.32 crore down 75%.

Commenting on the performance of the company Mr Prashant Panday, CEO, ENIL said,

There is clearly a recovery in the media markets, but I would wait for another 2 quarters before saying it with certainty. The media industry needs to focus on increasing yields, even while we add value to our advertisers. Our cost focus has helped in improving the margins. We plan to continue that focus in the coming year. We are particularly excited about the strength of the Mirchi brand as reflected in repeated listenership studies. The brand has also won several accolades during the year."

Commenting on the performance, Mr Sunder Hemrajani, Managing Director, TIM said:

"The revival of the OOH industry continued into Q4FY10. The Company recorded a revenue growth of 51.4% during the quarter and 5.2% in the financial year under review. There was significant improvement in the profitability of the business due to aggressive customer acquisition and the positive impact of the cost and productivity initiatives undertaken during the year."

Shareholding Pattern

As of March 31, 2010, total foreign investors hold 9.97% (8.51% at end of sequential quarter), Promoters hold 71.15% (71.15% at end of sequential quarter), MFs/FIs & Banks hold 1.88% (2.60% at end of sequential quarter), and others hold 18% (17.74% at end of sequential quarter).

Valuation

The shares of the company are trading at Rs 214.2 on the bourses trading at an EV/EBITDA of 23.6 times.