The FCF is about 50 cr on a mcap of about 250 cr - thats a yield of 20%+ so thats as good as it gets. Sales are also twice its mcap & at about 500cr. a debt free company at 1/2 its sales & 20% cash yield. What am i missing man?
Posts in category Value Pickr
Entertainment Network India Limited: Tuning in for gains (04-11-2015)
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Entertainment Network India Limited: Tuning in for gains (04-11-2015)
Hi Sachit,
I have done some very basic IRR calculations at various capacity utilization levels for ENIL's existing frequencies (renewal) and new frequencies and in all the cases, the IRR with reasonable assumptions (based on past track record) is much higher than one indicated by the management. Thus, it is very hard to believe for me that ENIL is working with 16% IRR unless my assumptions somewhere is materially wrong. My feel is that 16% post tax IRR is based on very conservative assumptions and there is good upside left. Also, management has mentioned that 16% is project IRR and equity IRR is likely to be much higher than that.
Dai-Ichi Karkaria Limited (04-11-2015)
But if you see carefully the results are not good for Y-o-Y case...however, for Q-o-Q looks good...
Entertainment Network India Limited: Tuning in for gains (04-11-2015)
Dhwanil & all,
There is an existing thread on ENIL and hence we can not allow you to start another thread. So please move the content to the existing thread and oblidge. You may have missed the search as the existing thread's title is ENIL. So all contributors in this thread are requested to move to the existing thread and oblige. This thread will be eventually deleted.
Balaji Amines (04-11-2015)
http://www.bseindia.com/xml-data/corpfiling/AttachLive/BEB8A44B_89BC_484B_BD40_FA4A49A24F9C_133046.pdf
good results. management seems to be walking the talk reducing debt and thus interest outgo.
shiv kumar
Nesco (04-11-2015)
hereon upside will come only from the exhibition business till IT building 4 is completed. I don't have much expectation from the Indabrator business. when earnings are flattish there will be a lot of opportunities to buy. this happened when IT Building 3 was under construction.
Entertainment Network India Limited: Tuning in for gains (04-11-2015)
Thanks dhwanil- I incidentally spent half a day with an ex-radio industry veteran and someone in the advertising industry to understand the dynamics of the radio business.
- the radio business has huge network effect which I will explain in the following paragraph:
all the yield comes from low volume local advertisers - eg. small shops, city specific activities and all the volume comes from large, national advertisers. So, sort of like facebook's same side network effect, the larger get more profitable and attract more volumes. This is the reason why ENIL has more than 100% of the profits from the industry.
This also leads to a reduction of marginal costs incrementally - which is the reason as channels move to tier III cities, the smaller guys drop out - it costs about for eg., Rs. 70 lakhs to run a FM station in say a salem every month and this can be done only if your content costs, DJ costs are shared with say a chennai where costs will be about Rs. 2-3 Cr. a month. This is the only way to get access to the high yield local advertisers and at the same time add volumes from a national advertisers like HUL - the lattter helps you break even and the former sis the pudding that throws out FCF's
the point you mentioned about high fixed costs is a double edged sword - I think the margins will shrink given the addition in fixed costs before they come up. So, I expect ROIC's to fall significnatly as the high upfront cost of licence, setting up stations kicks in and margins to climb down until FY 17 or FY 18 and then climb back for the better.
I am waiting for a couple of deep cuts in earnings on the EBITDA/PAT line over the next 12 months and will look to add then.
Entertainment Network India Limited: Tuning in for gains (04-11-2015)
Hiteshbhai,
Yes, I feel that ENIL is the best bet on pure radio play.
In terms of second and third frequency, management has indicated that they are evaluating 2 or 3 different formats which will provide product differentiation. In fact, the whole focus of acquiring the 2nd/3rd frequency is to attract the new listeners or provide content to existing listeners of other channels a differentiated content (unlike the general music content that all radio stations provide today) thus expanding the pie. There are enough indications by the management that it may be under a new "brand" itself, thus minimizing the chances of cannibalization and creating a new segment altogether.
Having said that, this again is "First time" for the industry and how well they are able to execute this and gain listenership remains to be seen. However, I have very high regard for their creative teams which delivers excellent new ideas from time to time. Thus, l believe that they will be able to pull it off.
Thomas Cook India-Will it move like Warren Buffet Stock (04-11-2015)
Ikya biz model is similar to Addeco (Swiss co). They reported YoY growth over several qtrs even in a mature Labor market viz. Europe. There is a an interesting note on the stock by Prof Sanjay Bakshi (of Fundoo Prof fame) Pls do have a look. He also mentions Issac (CEO) as an Fanatic to get the EBIDTA margins up to 8% from current 5.7% levels.
Disc: Invested at lower levels and continuing now