ICICI Securities has given buy rating to Entertainment Network with a target price of Rs 175. The share price moved up by 0.27 per cent from its previous close of Rs 129.65. The stock’s last traded price is Rs 130.

Entertainment Network (India) Ltd., incorporated in the year 1999, is a Small Cap company (having a market cap of Rs 619.48 Crore) operating in Media & Entertainment sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 38.46 Crore, down 74.29 % from last quarter Sales of Rs 149.63 Crore and down 70.53 % from last year same quarter Sales of Rs 130.52 Crore. The Company reported net profit after tax of Rs -37.91 Crore in latest quarter.

Investment Rationale
The quarter ended Jun’20 was a washout for Entertainment Network India (ENIL) due to Covid. Company has guided for gradual revenue recovery and growth only from Q4FY21 onward. However, it is working aggressively on cost saving and sees a resultant benefit of Rs 1 bn in FY21. Solutions business saw strong growth in past two years, but that has now come to a temporary halt due to the pandemic. Near-term earnings outlook remains bleak, but higher operating leverage of business means profitability will grow faster with recovery in revenues. The brokerage expects the solutions business to start scaling up again from FY22 onward. It has cut FY21E / FY22E EBITDA by 24.5% / 9.6% respectively, on weak outlook. Accordingly, it has cut target price to Rs 175.

Promoter/FII Holdings
Promoters held 74.8 per cent stake in the company as of June 30, 2020, while FIIs held 0.9 per cent, DIIs 8.6 per cent and public and others 15.7 per cent.