Company Update | Media

January 2, 2012

ENIL
Management meet takeaways
We met ENILs management to get an update on its business. Focus on core business improves profitability: ENIL demerged its outdoor business in FY2010 and scaled down its event management business in FY2012 to focus on its core business. This has enabled the company to post a consolidated profit of `56cr in FY2012 v/s a loss of `15cr in FY2010 (mainly due to losses in outdoor business). Alternate Brand Solutions, a subsidiary company, is now focusing solely on managing its IPR events instead of managing clients events on account of poor margins (due to increasing competition from unorganized sector). Volume driven revenue growth a concern: The slowdown in the economy has led to a decline in advertising rates with radio companies increasing ad inventory to sustain top-line growth. However, ENIL has still posted a 9.3% yoy growth in its 1HFY2013 standalone revenue to `144cr, driven by advertising volume growth. But ENIL has already increased its ad air time upto 20 minutes per hour, leaving little room for further volume growth in existing channels. Hence, going forward, the company will find it difficult to sustain top-line growth, if ad rates do not improve, till the time phase 3 policy is in place. Plans to increase ancillary revenue: ENIL plans to increase its share of revenue from on-ground activities to sustain growth during current subdued environment. The company proposes to offer an integrated advertising solution across print, radio and broadcasting leveraging its parents strong presence in print media as well as the news broadcasting business to complement its on ground activities. Phase 3 policy to be key growth driver: The phase 3 policy which is expected to add 839 new frequencies will significantly boost the reach of private FM stations. Phase 3 proposes to allow a radio broadcaster to own more than one channel, increase the license period to 15 years (from 10 years as of now) and reduce the lock-in period to 3 years, thus encouraging consolidation and operation of niche channels. TRAI has recommended the government to consider halving channel separation to 400 KHz, thereby doubling the number of channels. This is expected to augur well for ENIL and the overall radio industry. ENIL is expected to be the key beneficiary of Phase 3 since it has enough cash (~`274cr in 1HFY2013) to buy new licenses and the scale to increase cost efficiencies.

NOT RATED
CMP Target Price
Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Media 1,187 (274) 0.7 277/194 11,869 10 19,714 5,993 ENIL.BO ENIL.IN

`249 -

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 71.2 0.5 16.1 12.2

Abs. (%) Sensex ENIL

3m 4.7 4.4

1yr 27.0 13.9

3yr 12.9 24.2

Valuations
Y/E March P/E (x) P/BV (x) RoE (%) FY2010 (77.3) 3.2 (4.1) FY2011 68.6 3.1 4.6 FY2012 21.3 2.7 13.6 FY2013E 20.9 2.4 12.3 FY2014E 17.2 2.1 13.2
Amit Patil 022-39357800 Ext: 6839 amit.patil@angelbroking.com

Source: Company, Angel Research Note: FY13E and FY14E are Bloomberg estimates.

Please refer to important disclosures at the end of this report

ENIL | Company Update

Exhibit 1: Focus on core business improves consol profitability

80 60 40 20 0 FY2009 (20) (40) (60) (80) (60) Standalone Consolidated FY2010 (15) 18 3 17 FY2011 FY2012 52 57 56

Source: Company, Angel Research

Exhibit 2: RAM Statistics

Demographic: 25-44 AB Rank 1 2 3 4 1 2 3 4 1 2 3 4 Mumbai Banglore Cities Kolkatta Stations Radio Mirchi 98.3 Big FM 92.7 Fever FM 104 Red FM 93.5 Radio City 91.1 Big FM 92.7 Radio Mirchi 98.3 Red FM 93.5 Radio Mirchi 98.3 Radio City 91.1 Big FM 92.7 Red FM 93.5 Week 34 753 640 401 506 472 561 564 477 907 799 622 628 19 August - 8 December 2012 (Cume in 000's) Week 39 818 738 429 502 539 562 541 453 874 835 610 667 Week 44 801 622 470 478 569 528 626 536 838 861 571 734 Week 49 918 614 558 510 617 603 525 488 886 819 687 648 % chg(34-49) 18 (4) 28 1 24 7 (7) 2 (2) 2 9 3

Source: Company, Angel Research

Company Background
Entertainment Network India Ltd (ENIL) is a subsidiary of Times Infotainment Media Limited (TIML), the holding company promoted by Bennett Coleman & Company Ltd (BCCL). It operates under the brand Radio Mirchi across 14 states with 32 stations. It is the No.1 radio brand with more than 41mn listeners. ENIL benefits from close association to Times Group aiding it to leverage its parents strong presence in print media as well as news broadcasting business to offer a integrated advertising solution.

January 2, 2012

ENIL | Company Update

Profit & Loss Statement (Consolidated)

Y/E March (` cr) Operating income % chg Total Expenditure EBITDA (% of Net Sales) Depreciation& Amortisation EBIT Interest & other Charges Other Income Recurring PBT Extraordinary Inc/(exp) PBT Tax PAT (reported) Add: Share of earnings of associate Less: Minority interest (MI) Prior period items Reported PAT (After MI) Adjusted PAT Basic EPS (Rs) Fully Diluted EPS (Rs) 437 (10) (2.4) 53 (63) 14 4 (73) 0 (73) (0) (73) 0 (13) 0 (60) (60) (12.7) (12.7) FY2009 426 FY2010 422 (1.0) 378 44 10.3 53 (9) 12 2 (19) 0 (19) 2 (22) 0 (6) 0 (15) (15) (3.2) (3.2) FY2011 464 9.8 362 102 21.9 42 59 4 3 59 (18) 41 23 18 0 1 0 17 17 3.6 3.6 FY2012 311 (32.9) 211 100 32.1 33 67 0 12 79 0 79 23 56 0 1 0 56 56 11.7 11.7 108 39 26.7 16 24 0 10 33 0 33 9 24 0 0 0 24 24 5.0 5.0 1HFY2013 147

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ENIL | Company Update

Balance Sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves & Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Others Total Liabilities APPLICATION OF FUNDS Net Block Capital Work-in-Progress Goodwill Investments Deferred Tax Asset Current Assets Cash Loans & Advances Debtors Current liabilities & Provisions Net Current Assets Other Assets Total Assets 305 14 30 307 13 163 132 90 218 566 268 4 2 29 268 28 99 141 112 156 457 180 0 87 173 16 45 113 76 97 29 394 150 0 184 166 45 29 93 69 98 21 452 136 0 264 129 10 29 90 64 65 7 473 48 333 380 20 148 22 (4) 566 48 317 365 13 57 21 457 48 335 382 9 3 394 48 391 438 10 4 452 48 416 463 5 4 473 FY2009 FY2010 FY2011 FY2012 1HFY2013

January 2, 2012

ENIL | Company Update

Cash Flow Statement (Consolidated)

Y/E March (` cr) Profit before tax Depreciation (Inc)/Dec in Working Capital Others Direct taxes paid Cash Flow from Operations (Inc.)/Dec.in Fixed Assets (Inc.)/Dec. in Investments Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Adjustments Closing Cash balances FY2009 (73) 53 115 28 (12) 110 (53) 7 (46) (45) (17) (62) 2 10 13 FY2010 (19) 53 57 44 (8) 126 (7) 0 (7) (91) (13) (104) 16 13 28 FY2011 41 42 (97) 47 (17) 16 (28) (40) 2 (66) 43 9 52 1 28 (14) 16 FY2012 79 33 28 (19) (4) 117 (2) (87) 2 (88) 29 16 45

January 2, 2012

ENIL | Company Update

Key Ratios (Consolidated)

Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (Rs) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont Analysis(%) EBIT margin Tax retention ratio (%) Asset turnover (x) RoIC (Pre-tax) RoIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) RoCE (Pre-tax) Angel RoIC (Pre-tax) RoE Solvency ratios (x) Net debt to Equity Net debt to EBITDA Interest Coverage
0.4 (13.0) (4.4) 0.1 0.6 (0.7) (0.3) (1.0) 16.8 (0.5) (2.3) (11.1) (11.7) (15.8) (1.7) (1.8) (4.1) 14.0 17.3 4.6 15.9 29.0 13.6 (14.8) 99.6 0.8 (11.4) (11.3) 9.7 0.4 (18.8) (2.1) 111.9 0.9 (1.8) (2.0) 13.2 0.2 (5.4) 12.8 43.4 1.3 17.2 7.5 5.4 (0.1) 7.3 21.6 70.7 1.3 29.0 20.5 (0.4) 12.2 (12.7) (12.7) (1.6) 79.9 (3.2) (3.2) 7.8 76.7 3.6 3.6 12.5 80.2 11.7 11.7 18.5 92.0 (19.7) (153.5) 3.1 3.1 (128.6) 2.4 (77.3) 31.9 3.2 2.9 28.1 2.7 68.6 19.9 3.1 2.3 10.7 2.8 21.3 13.5 2.7 3.1 9.6 2.1

FY2009

FY2010

FY2011

FY2012

January 2, 2012

ENIL | Company Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

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Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

ENIL No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

January 2, 2012

ENIL | Company Update

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Research Team Fundamental: Sarabjit Kour Nangra Vaibhav Agrawal Bhavesh Chauhan Viral Shah Sharan Lillaney V Srinivasan Yaresh Kothari Ankita Somani Sourabh Taparia Bhupali Gursale Vinay Rachh Amit Patil Shareen Batatawala Twinkle Gosar Tejashwini Kumari Technicals: Shardul Kulkarni Sameet Chavan Sacchitanand Uttekar Derivatives: Siddarth Bhamre Institutional Sales Team: Mayuresh Joshi Hiten Sampat Meenakshi Chavan Gaurang Tisani Akshay Shah Production Team: Tejas Vahalia Dilip Patel Research Editor Production tejas.vahalia@angelbroking.com dilipm.patel@angelbroking.com VP - Institutional Sales Sr. A.V.P- Institution sales Dealer Dealer Sr. Executive mayuresh.joshi@angelbroking.com hiten.sampat@angelbroking.com meenakshis.chavan@angelbroking.com gaurangp.tisani@angelbroking.com akshayr.shah@angelbroking.com Head - Derivatives siddarth.bhamre@angelbroking.com Sr. Technical Analyst Technical Analyst Technical Analyst shardul.kulkarni@angelbroking.com sameet.chavan@angelbroking.com sacchitanand.uttekar@angelbroking.com VP-Research, Pharmaceutical VP-Research, Banking Sr. Analyst (Metals & Mining) Sr. Analyst (Infrastructure) Analyst (Mid-cap) Analyst (Cement, FMCG) Analyst (Automobile) Analyst (IT, Telecom) Analyst (Banking) Economist Research Associate Research Associate Research Associate Research Associate Research Associate sarabjit@angelbroking.com vaibhav.agrawal@angelbroking.com bhaveshu.chauhan@angelbroking.com viralk.shah@angelbroking.com sharanb.lillaney@angelbroking.com v.srinivasan@angelbroking.com yareshb.kothari@angelbroking.com ankita.somani@angelbroking.com sourabh.taparia@angelbroking.com bhupali.gursale@angelbroking.com vinay.rachh@angelbroking.com amit.patil@angelbroking.com shareen.batatawala@angelbroking.com gosar.twinkle@angelbroking.com tejashwini.kumari@angelbroking.com

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January 2, 2012