GICS Industry : Media l Sub Industry : Broadcasting l Website : www.enil.co.

in

Entertainment Network (India) Ltd

Key Stock Indicators
NSE Ticker : Bloomberg Ticker : Face value / Share: Div. Yield (%): ENIL ENIL:IN 10.0 0.0 CMP (as on 29 Apr 2011 Rs/share): 52-week range up to 29 Apr 2011 (Rs)(H/L): Market Cap as on 29 Apr 2011 (Rs mn): Enterprise Value as on 29 Apr 2011 (Rs mn): Div. Yield (%): 0.0 241.3 275.80/179.10 11,500 11,794 Shares outstanding (mn) : Free Float (%) : Average daily volumes (12 months) : Beta (2 year) : 47.7 28.9 148,527 1.1

Incorporated in 1999, Entertainment Network (India) Limited (ENIL) is a private frequency modulation (FM) radio operator engaged in radio broadcasting business in India. The company operates in three main business segments viz. Radio broadcasting (Brand- Radio mirchi), Outdoors (Out-of-home (OOH) media brand - times OOH) and Event management (through brand 360degree).

Key Financial Indicators

Revenue (Rs mn) EBITDA ma rgi ns (%) PAT (Rs mn) PAT ma rgi ns (%) Gea ri ng (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m. : Not meaningful

KEY HIGHLIGHTS
Among the largest player in private FM radio industry ENIL is one of the leading players in private FM radio network in India and operates under the radio mirchi brand. The company has approximately 33-35% market share of private FM radio industry as on December 2010. The company operates 32 radio stations across 14 states in as many as 10 different languages. As per the Indian Readership Survey (IRS) Q1 2010, Radio mirchi has over 41 million weekly listeners across the country, which makes it almost double the size of the next radio brand. Radio mirchi is the leader in the key markets of Mumbai, Delhi and Kolkata and it is close number 2 in Bangalore. Phase III policy is the key growth driver for the company With the implementation of the Phase III policy by the Ministry of Information and Broadcasting, Government of India, ENIL will pan out wide growth, which will extend the reach of private FM radio to towns with 0.10 million plus population. Highlights of the phase III policy include automatic extension of the license beyond ten years, geographical expansion (increase in number of FM channels and number of cities), multiple frequencies (in the same city), tradability of licenses and permitting broadcasting of news and current affairs. The 3rd Phase of radio reforms is expected to increase the number of FM towns/cities from around 85 to over 250. The number of frequencies would also increase from ~240 to almost 750. This increase in the number of channels and cities would make the medium even more relevant for advertisers which in turn will benefit the company by attracting higher advertising revenues.

Mar-08 4,139.2 8.1 -190.7 -4.6 0.7 -4.0 n.m 6.0 2.3 n.m 58.0

Mar-09 4,273.8 -1.7 -729.3 -17.1 0.6 -15.3 n.m 2.2 n.m n.m n.m

Mar-10 4,227.3 10.8 -217.8 -5.2 0.2 -4.6 n.m 4.7 n.m n.m 25.9

Shareholding (As on Mar 31, 2011)

FII 16% DII 1% Others 12%

KEY RISKS
Radio industry is largely dependent upon advertising revenues Retaining good talent with low attrition rate Dispute between radio broadcasters and music labels for music royalties
Promoter 71%

Indexed price chart Stock Performances vis--vis market

Returns (%) YTD ENIL NIFTY
Note: 1) YTD returns are since April 1, 2010 to Apr 29, 2011. 2) 1-m, 3-m and 12-m returns are up to Apr 29, 2011.
(index) 140 ('000) 6000 5000 4000 3000 2000 1000 0 Nov-10 Apr-10 Dec-10 Aug-10 Sep-10 Oct-10 Feb-11 Jun-10 Jul-10 May-10 Mar-11 NIFTY Jan-11

1-m 2 0

3-m 11 4

12-m 21 9

120 100 80 60 40 20 0

15 9

Volumes (RHS)

ENIL

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Entertainment Network (India) Ltd

BACKGROUND
Headquartered in Mumbai, ENIL was incorporated in 1999. It is a subsidiary of Times Infotainment India Ltd (TIML), a 100% owned subsidiary of Bennett Coleman and Company Ltd (BCCL), the flagship company of the Times group. ENIL is a city-centric media company which operates in the radio broadcasting segment, events segment and outdoor segment. Under radio broadcasting segment the company operates FM radio broadcasting stations through the brand radio mirchi through 32 stations across 14 states. This segment consists of activities relating to airtime sales. The events segment consists of activities relating to management of events like large-format events as well as own event brands. The outdoors segment comprises activities relating to advertising on bus queue shelters, light emitting diode, metro stations and flyovers. ENIL has two subsidiaries viz. Alternate Brand Solutions (India) Limited (ABSL) and Times Innovative Media Limited (TIM). ABSL is engaged in the business of event management or experiential marketing, through which it operates its experiential marketing brand 360Degrees. TIM is engaged in the business of out-of-home (OOH) media under the brand and style Times OOH. The company is one of the largest organized OOH players in India with a formidable portfolio of contracts including the Delhi & Mumbai international airports. During FY10, radio broadcasting segment contributes ~54%, events ~9% and outdoors ~37% to the total revenues of the company. The employee strength of the company was 688 as on March 31, 2010.

COMPETITIVE POSITION
Peer Comparison

Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgins (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m: Not meaningful

Entertainment Reliance Broadcast Sun TV Network Zee Entertainment Network India Ltd Network Ltd Limited Enterprises Ltd Mar-10 Mar-10 Mar-10 Mar-10 4,227.3 1,824.3 14,538.2 22,070.1 10.8 -7.8 75.3 28.7 -217.8 -761.3 5,017.4 6,145.5 -5.2 -41.7 34.5 27.8 0.2 n.m 0.1 0.1 -4.6 -16.5 12.7 14.2 n.m n.m 33.5 8.8 4.7 n.m 10.5 2.5 n.m n.m 49.7 30.4 n.m 33.1 29.5 25.9 n.m 15.0 7.7
Key Financial Indicators Units Revenue PAT PAT ma rgi ns EBITDA growth PAT growth Gea ring RoCE RoE Rs mil li on Rs mil li on Per cent Per cent Per cent Ti mes Per cent Per cent EBITDA ma rgins Per cent

FINANCIAL PROFILE
Top-line remained flat, margins improved significantly in FY10 ENILs top-line remained flat at ~ Rs.4.2 bn in FY10. Revenues from event segment dropped by ~27% year-on-year. However further revenue decline was tempered by growth in outdoor media segment by ~ 6% (which contributed ~37% to the total revenues during FY10). EBITDA margins showed significant growth in FY10. They stood at 10.8% as against negative 1.7% in FY09. This growth was mainly on account of reduction in production expenses (royalty, event expenses and license fees) and employee cost and administrative expenses. Production expenses as a percentage of sales fell from 56.18% in FY09 to 45.81% in FY10. ENILs net loss declined to Rs.217.8 mn in FY10 as compared to Rs.729.3 mn in FY09. Significant growth in operating profits coupled with reduction in interest expenses by ~23% year-on-year caused decline in net loss during the year.

Mar-08
4,139.2 8.1 -190.7 -4.6 75.8 n.m n.m 0.7 2.3 n.m

Mar-09
4,273.8 -1.7 -729.3 -17.1 3.3 n.m n.m 0.6 n.m n.m

Mar-10
4,227.3 10.8 -217.8 -5.2 -1.1 n.m n.m 0.2 n.m n.m

Revenue growth Per cent

INDUSTRY PROFILE
Media and Entertainment The Indian Media and Entertainment industry experienced a modest growth of 6 per cent in 2009 reaching a size of around Rs 613 billion. The industry went through a tough phase in 2009 due to the economic slowdown which resulted in a decline in ad spends. With improvement in macroeconomic environment and advertising budgets coming back on track, the Media & Entertainment industry has recovered reasonably. Subscription revenues, which maintained healthy growth during the slowdown period as well are also in growth trajectory, driven by the growing subscriber base for DTH and digital cable players and the increased penetration of print in regional markets.

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Entertainment Network (India) Ltd

ANNUAL RESULTS
Income Statement (Rs million ) Net Sales Operating Income EBITDA EBITDA Margin Depreciation Interest Other Income PBT PAT PAT Margin No. of shares (Mn No.) Earnings per share (EPS) Cash flo w (Rs million ) Pre-tax profit Total tax paid Depreciation Change in working capital Cash flo w from operating activities Capital Expenditure Investments and others Balance sheet (Rs m illion ) Equity share capital Reserves and surplus Tangible net worth Deferred tax liablity:|asset| Long-term debt Short-term-debt Total debt Current liabilities Total provisions Total liabilities Gross block Net fixed assets Investments Cur rent assets Receivables Inventories Cash Total assets Ratio Mar-08 -182.1 -28.9 362.8 -2,380.4 -2,228.6 -519.9 -4.8 Mar-09 -734.4 -28.7 525.6 1,208.1 970.6 -525.7 30.0 Mar-10 -188.5 -0.7 525.6 805.2 1,141.6 -60.6 -16.5 Revenue growth (%) EBITDA growth(%) PAT growth(%) EBITDA margins(%) Tax rate (%) PAT margins (%) Dividend payout (%) Dividend per share (Rs) BV (Rs) Return on Equity (%) Return on capital employed (%) Gearing (x) Interest coverage (x) Debt/EBITDA (x) Asset turnover (x) Current ratio (x) Gross current assets (days) Mar-08 75.8 n.m n.m 8.1 -14.7 -4.6 0.0 0.0 61.8 n.m 2.3 0.7 1.2 5.9 3.4 2.5 345 Mar-09 3.3 n.m n.m -1.7 -3.9 -17.1 0.0 0.0 51.1 n.m n.m 0.6 n.m n.m 2.2 1.6 231 Mar-10 -1.1 n.m n.m 10.8 -0.4 -5.2 0.0 0.0 51.2 n.m n.m 0.2 3.4 1.3 1.9 1.6 203 Mar-08 4,134.7 4,139.2 334.8 8.1 362.8 277.1 123.0 -196.3 -190.7 -4.6 47.7 -4.0 Mar-09 4,262.4 4,273.8 -73.6 -1.7 525.6 174.3 39.1 -731.9 -729.3 -17.1 47.7 -15.3 Mar-10 4,220.1 4,227.3 454.6 10.8 525.6 134.2 16.7 -193.8 -217.8 -5.2 47.7 -4.6 Mar-08 476.6 2,468.6 2,945.2 -61.1 450.0 1,527.9 1,977.9 833.5 28.7 5,724.2 1,729.6 1,395.7 30.0 4,298.5 1,335.2 0.0 147.0 5,724.2 Mar-09 476.7 1,958.8 2,435.5 -92.3 0.0 1,514.4 1,514.4 923.5 35.4 4,816.5 2,212.6 1,614.2 0.0 3,202.3 1,346.0 0.0 162.1 4,816.5 Mar-10 476.7 1,965.8 2,442.5 -69.1 0.0 574.3 574.3 1,086.1 36.5 4,070.3 2,321.6 1,374.0 16.5 2,679.9 1,406.2 0.0 281.2 4,070.4

Cash flo w from investing activities Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries)

-524.7 1,617.0 782.0 0.0 375.4

-495.7 2.2 -463.5 0.0 1.5

-77.1 0.0 -940.1 0.0 -5.3

Cash flo w from financing activities Change in cash position Opening cash Closing cash
n .m : Not meani ngfu l;

2,774.4 21.1 125.9 147.0

-459.8 15.1 147.0 162.1

-945.4 119.1 162.1 281.2

QUARTERLY RESULTS
Profit and loss account (Rs million) No of Months Revenue EBITDA Interes t Depreci a ti on PBT PAT Dec-10 3 1,468.8 373.1 11.7 114.5 67.9 (32.0) 100.0 25.4 0.8 7.8 4.6 (2.2) % of Rev Dec-09 % of Rev 3 1,169.1 177.1 30.1 137.8 9.3 9.4 100.0 15.1 2.6 11.8 0.8 0.8 Sep-10 3 1,100.5 148.6 4.4 111.0 33.2 3.2 100.0 13.5 0.4 10.1 3.0 0.3 % of Rev Dec-10 9 3,721.2 670.6 25.2 338.6 127.9 (23.8) 100.0 18.0 0.7 9.1 3.4 (0.6) % of Rev Dec-09 9 3,029.0 106.9 92.7 407.1 (393.0) (388.5) 100.0 3.5 3.1 13.4 (13.0) (12.8) % of Rev

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Entertainment Network (India) Ltd

FOCUS CHARTS & TABLES
Rs mn 900 800 700 600 500 400 300 200 100 0 Jun-08 Mar-08

Quarterly sales & y-o-y growth

Per cent 50 40 30 20 10 0 -10 -20 -30

Rs mn 300 250 200 150 100 50 0 -50

Quarterly PAT & y-o-y growth

Per cent 1,000 500 0 -500 -1,000 -1,500 -2,000 -2,500

Dec-08

Dec-09

Mar-08

Mar-09

Dec-08

Dec-09

Mar-09

Sales

Sales growth y-o-y (RHS)

Mar-10

Dec-10

Sep-08

Sep-09

Sep-10

Jun-09

Jun-10

Net Profit

Net profit growth y-o-y (RHS)

Rs/share 6 5 4 3 2 1 0 -1 Dec-08

EPS

Per cent 40 35 30 25 20 15 10 5 0 -5 -10 Jun-08 Mar-08 Dec-09 Mar-10 Dec-10 Sep-09 Sep-10 Jun-10

Movement in operating and net margins

Dec-08

Dec-09

Mar-10

Dec-10 Dec-10 Sep-10

Sep-08

Sep-09

Sep-08

Sep-09

Jun-09

Mar-09

Sep-08

Jun-08

Mar-08

Mar-09

Jun-09

OPM

Mar-10

Shareholding Pattern (Per cent) Jun 2010 Sep 2010 Promoter 71.2 71.2 FII 9.9 12.2 DII 0.8 1.3 Others 18.2 15.4

Dec 2010 71.2 13.9 0.7 14.3

Mar 2011 71.2 16.1 0.6 12.2

Board of Directors Director Name Vineet As hok Kuma r Ja i n (Mr.) Ra vi ndra Rikha b Cha nd Dha riwa l (Mr.) Ra vi ndra Kuma r Kulka rni (Mr.) Na ra ya na n Kuma r (Mr.)

Designation Non-Executi ve Cha irma n Non-Executi ve Di rector Non-Executi ve Di rector Non-Executi ve Di rector

Pra s ha nt Ba bul a l Pa nda y (Mr.) Whol etime Di rector Amba Preeta m Pa ri gi (Mr.) Non-Executi ve Di rector Richa rd Wi ll ia m Sa l da nha (Mr.) Non-Executi ve Di rector

Additional Disclosure This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT). Disclaimer This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person especially outside India or published or copied in whole or in part, for any purpose. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please contact 'Client Servicing' at +91-22-33423561, or via e-mail: clientservicing@crisil.com.

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Jun-10

NPM

Sep-10

Jun-08

Jun-09

Jun-10