Quarterly Analysis

For the quarter ended June 2013, ENIL reported 22% incline in operating revenues at consolidated level to Rs 85.24 crore. OPM increased by 580 bps to 35%. The operating profit has increased by 46% to Rs 29.86 crore. The consolidated net profit was up by 50% to Rs 20.07 crore.

On standalone basis, the company's net revenue was up by 24% to Rs 85.24 crore. Revenue growth was led by higher volume. OPM inclined by 580 bps to 35.1% due to fall in employee cost by 320 bps to 22.3% and other expenditure by 260 bps to 20.2% of sales. Other expenses include a charge of Rs 1.1 crore towards provision for brand capital. The operating profit was up by 48% to Rs 29.9 crore.

Other income stood at Rs 5.26 crore, down 13%. Depreciation and amortization was down by 1% to Rs 7.8 crore. The profit before tax was up by 49% to Rs 27.34 crore.

Tax was up by 39% to Rs 7.42 crore. Tax rate went down from 29.2% to 27.15%. The net profit was up by 54% to Rs 19.92 crore.

For the year ended March 2013

It has reported 9% incline in operating revenues at consolidated level to Rs 339.56 crore. OPM was down 130 bps to 30.8%. As a result, the operating profit was up by just 5% to Rs 104.42 crore. The consolidated net profit was up by 22% to Rs 68.32 crore.

On standalone basis, the company's net sales was up by 12% to Rs 338.39 crore. OPM was down by 260 bps to 30.8% due to rise in marketing expenses by 110 bps to 19.6%, employee cost by 90 bps to 21.7% and other expenditure by 70 bps to 17.9% of sales. The operating profit was up by just 3% to Rs 104.16 crore.

Other income stood at Rs 16.97 crore, up 47%. Depreciation and amortization was down by 2% to Rs 31.72 crore. The profit before tax was up by 12% to Rs 89.41 crore.

Tax was down by 6% to Rs 21.77 crore. Tax rate was around 24.35%. The net profit was up by 20% to Rs 67.64 crore.

Management Comments

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

It's been a surprisingly strong quarter for media, especially radio broadcasters including Mirchi. It appears advertisers are responding to the slowdown by launching new products, and even more promotional offers. This helps radio. We expect this to continue, even though we expect growth rates to taper off eventually. On Phase 3, the radio industry is seeking a rationalization of reserve fees on the same lines as is happening with 2G reserve fees, as well as an extension of Phase 2 licenses. We expect policy clarity in the next few months. Lastly, I am happy that the shareholders have approved ENIL's maiden dividend of 10%

Other Developments

As per the Indian Readership Survey (IRS) 2012 Q4, Radio Mirchi is a clear leader with #1 position in 21 out of 32 markets in which it operates.

Shareholding Pattern

The promoter holding stood at 71.15%.

Valuation

The share is trading at Rs 221.85 on BSE