ENILNSEQ2FY2023November 16, 2022

Entertainment Network (India) Limited

5,599words
44turns
6analyst exchanges
4executives
Management on call
Prashant Panday
MANAGING DIRECTOR, ENTERTAINMENT NETWORK INDIA LIMITED
Yatish Mehrishi
CHIEF EXECUTIVE OFFICER, ENTERTAINMENT NETWORK INDIA LIMITED
Narayanan Subramanian
EXECUTIVE DIRECTOR & GROUP CHIEF FINANCIAL OFFICER, ENTERTAINMENT NETWORK INDIA LIMITED
Sanjay Kumar Ballabh
HEAD (FINANCE), ENTERTAINMENT NETWORK INDIA LIMITED
Key numbers — 40 extracted
Rs. 103 crore
he year which is without any impact of COVID and the results are there to see. We did revenues of Rs. 103 crore in the ENIL domestic business. This is 90% of our pre-pandemic levels, which shows how quickly th
90%
results are there to see. We did revenues of Rs. 103 crore in the ENIL domestic business. This is 90% of our pre-pandemic levels, which shows how quickly the business is getting back to the pre-pande
92%
have to remove that because we surrendered that in that period of time, then we have actually hit 92% of our pre-pandemic revenues. So, I think this is a very strong recovery that we are seeing and r
Rs 103 crore
emember this is just the first time that we have had a great quarter without the impact of COVID. Rs 103 crores also represents the 50% growth over the last year, but again because last year base was a low ba
50%
e that we have had a great quarter without the impact of COVID. Rs 103 crores also represents the 50% growth over the last year, but again because last year base was a low base. We are just getting o
Rs. 25.5 crore
urse talk about digital platform in a few minutes. Our EBITDA without digital platform impact was Rs. 25.5 crore. Now, this is remarkable thing that this is 93% of our pre-pandemic quarter which shows that not
93%
DA without digital platform impact was Rs. 25.5 crore. Now, this is remarkable thing that this is 93% of our pre-pandemic quarter which shows that not only have revenues recovered, but EBITDA has r
Rs 25.5 crore
hat our revenues rise, our EBITDA rises faster. So, on growth over last year basis this EBITDA of Rs 25.5 crore represents the 186% growth over last year. So, the very strong EBITDA level performance. Now, let
186%
ITDA rises faster. So, on growth over last year basis this EBITDA of Rs 25.5 crore represents the 186% growth over last year. So, the very strong EBITDA level performance. Now, let me give you the EBI
Rs 5.8 crore
tform, we are making investments on a quarterly basis. This quarter also we made an investment of Rs 5.8 crore being incurred a loss of Rs 5.8 crore on our digital platform. If I take the effect of this loss
Rs. 19.8 crore
rm. If I take the effect of this loss then my EBITDA overall with platform investment included is Rs. 19.8 crore. This is 72% of the pre-pandemic number and this represents the 122% growth over last year. The i
72%
of this loss then my EBITDA overall with platform investment included is Rs. 19.8 crore. This is 72% of the pre-pandemic number and this represents the 122% growth over last year. The investments in
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Guidance — 20 items
Prashant Panday
opening
“So, again you will realize from the numbers I gave you about the core revenue business, the EBITDA margins, the PBT margins etcetera it has been a very strong quarter and it is my belief that going forward with COVID now well and truly behind us, the radio business is bound to grow very rapidly.”
Prashant Panday
opening
“Now you know that these people are wealthy people, these people live in big cities and these people are actually the people who have monies and advertisers target these people.”
Prashant Panday
opening
“When the M-Ping revenue start coming in, is when our business will be pushed, our digital business will start going towards a 25% share of our total revenues.”
Prashant Panday
qa
“So, I would like to believe that the second half of the year will be far stronger than the first half of the year has been and traditionally also the second half of the year is stronger because of festivals and because it is anyway in the media and entertainment business have stronger half.”
Prashant Panday
qa
“First we do not give any guidance for the future as a company.”
Prashant Panday
qa
“So, we launched our platform which have huge potential and now we have launched the audio ad network which is M-Ping between all of these we believe that yes we should be able to hit our 25% target.”
Prashant Panday
qa
“Now, we have a strategy and we have mentioned this in our earlier calls to make other similar strategic investments in the coming years and the cash reserve that we have got some of it will be deployed towards strategic investments in of this nature as we said of Spardha.”
Prashant Panday
qa
“Most of that plan is to invest using our internal accruals and like I mentioned a lot of the money that we have generated will be used for this investment.”
Prashant Panday
qa
“So, if you provide the right content then you can build the subscriber base and that will be our attempt with our Mirchi Plus platform as well, but more importantly on international markets, subscription is a proven model, it is a big mode and it is a revenue generating model.”
Prashant Panday
qa
“So, that will be a big contributor and then of course there is revenue that comes from public platforms like YouTube and Facebook and all of the others.”
Risks & concerns — 5 flagged
It must be view in conjunction with the risk that the company faces and may not be updated from time-to-time.
— Runjhun Jain
This is the first time that we are having a second quarter of the year which is without any impact of COVID and the results are there to see.
— Prashant Panday
So, I think this is a very strong recovery that we are seeing and remember this is just the first time that we have had a great quarter without the impact of COVID.
— Prashant Panday
Let me take your second part of the question like I mentioned the second quarter results were strong because there was no impact of COVID and you will agree with me in the second half of the year, I think we can safely assume that now the impact of COVID has gone if this continues Entertainment Network India Limited November 10,2022 then I think you can see in the markets there is heavy shopping happening, there is a lot of consumer demand for all kinds of consumer products.
— Prashant Panday
We are also seeing the impact of that on our business, the positive impact of that on our business.
— Prashant Panday
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Q&A — 6 exchanges
Q
I had two questions sir one on quarter-on-quarter basis our digital products revenue it seems we did a bit that lower, so what could be the trajectory on quarter-on-quarter basis from the revenue from digital products, if you can give us some highlights and second is on the overall market at the Quarter 3 and the Quarter 4 if you can give some commentary on like how are we seeing because for Quarter 3 October month has already been gone, so how are you seeing the business activity on the ground and especially in the solution business are we seeing any encouraging size?
Prashant Panday
Let me take your second part of the question like I mentioned the second quarter results were strong because there was no impact of COVID and you will agree with me in the second half of the year, I think we can safely assume that now the impact of COVID has gone if this continues Entertainment Network India Limited November 10,2022 then I think you can see in the markets there is heavy shopping happening, there is a lot of consumer demand for all kinds of consumer products. We are also seeing the impact of that on our business, the positive impact of that on our business. So, I would like to
Q
Two questions - first one information like in our radio business when is the next renewal like what is the period for which we have these rights and then when it need to be renewed. Please let me update and explain this a little bit in detail and second question is on the capital allocation part like now we have a radio business which is now coming into profitability and we will throw a cash flow from that, so what is our strategy regarding digital expenditure like what is our strategy like we want to utilize only this cash flow to build up digital business or we want to use our cash reserve m
Prashant Panday
Subrata I will answer the second part of the question first and I would like to mention to all the investors who are present on the call you might have seen the stock exchange notification we sent out a few days ago. We have made our first strategic investment in a company called Spardha. Spardha is into online music education. Now, you will appreciate that this is an area which connects very strongly with Mirchi core business because it is music, it connects with youngsters who wants to learn music, it has a global scale, global footprint and it is a technology company with the consumer facin
Q
So, the question is largely on pricing so we have seen volume bounce back very rapidly on radio, what is your outlook on pricing next year?
Prashant Panday
Sanjay will give you the details on the pricing in a minute, but the outlook on pricing is that it will improve from the place that we are at right now. Remember compared to pre-pandemic level we are at approximately 35%, 37% down in pricing, the growth has been volume led, but going forward as the market becomes more busy there is more advertising volume. It is a natural principle of economics that the pricing will start to pick up from here. However, in previous calls I have also mentioned that it will take several years before the pricing goes back to pre-pandemic levels. In fact, it is pos
Q
What was the revenue from radio our core radio business if you can give me the figure I might have missed when you are giving the first understanding of numbers?
Sanjay Kumar Ballabh
I hope you are asking for the current quarter number? Yes the current quarter radio number revenue number? Rs 75.2 crore.
Q
During the pandemic period we had made certain changes in the cost structure the resulting savings that who are quite significant and post that the digital initiative was started probably the run rate was in the range of around 5 crores to 6 crores on every quarter basis, so right now what the savings that we had or the changes in the cost structure how much of that we are still able to sustain because the profit numbers somehow do not indicate any kind of savings that we are able to retain. Most of the saving seem to be again back invested in the business, is my reading correct or is it the r
Prashant Panday
So, you are very right that in the year FY21 we took significant cost initiative and we reduced our operating cost by as much as Rs. 90 crores in the full year. Now in the second year, that is FY22 of the pandemic we were able to retain and hold on to most of the savings I think we would Entertainment Network India Limited November 10,2022 have probably saved about Rs 80 crore or thereabout in FY22 compared to pre-pandemic. Now, we had also mentioned that we planned even as the business grows and as we start adding back people and marketing and other such spending we will keep a tight grip on
Q
Thank you very much and thank you dear investors for attending this call. As I mentioned at the beginning of the call you would now like to interact with Mr. Yatish Mehrishi who takes over as Chief Executive Officer from the next conference call. So, please join me in welcoming him and see you next time. Have a good day. Thank you very much.
Management
Speaking time
Prashant Panday
13
Moderator
8
Sanjay Kumar Ballabh
7
Subrata Sarkar
5
Chetan Thacker
5
Sumit Rathi
4
Runjhun Jain
1
Naveen Kulkarni
1
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Opening remarks
Runjhun Jain
Thank you. Good evening everyone. Welcome to the Q2 and H1 FY23 Earnings Call of Entertainment Network India Limited. To take you through the results and answer your questions today we have this top management team from the company here represented by Mr. Prashant Panday – Managing Director, Mr. Yatish Mehrishi – CEO, Mr. Narayanan Subramanian is the Executive Director & Group CFO and Mr. Sanjay Kumar Ballabh – Head of Finance. The financial and presentation has already been uploaded on the website today. Should you need any further information you can reach out to us at EY IR team and we would be happy to send it over to you. Before we proceed with the call a disclaimer please do note that anything said on this call during the course of introduction and in the documents which reflects the outlook towards the future or which should be constructed as a certain forward-looking statement. It must be view in conjunction with the risk that the company faces and may not be updated from time-
Prashant Panday
Thank you Runjhun and welcome dear investors to this conference call. First and foremost, let me introduce Yatish Mehrishi to you. He is our new Chief Executive Officer as recently stepped down to make way for Yatish to take over as the Chief Executive Officer. I will continue to remain the MD of the company for a certain period of time. This is a normal succession planning exercise that all listed companies go through, and this is part of that. That said, let me now share with you certain highlights of the results of the company. First and foremost, I would like to make the point that we have had a very good quarter after two consecutive years of COVID infected quarters. This is the first time that we are having a second quarter of the year which is without any impact of COVID and the results are there to see. We did revenues of Rs. 103 crore in the ENIL domestic business. This is 90% of our pre-pandemic levels, which shows how quickly the business is getting back to the pre-pandemic
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