Captains Speak     

Published: March 31, 2024
Updated: March 31, 2024

Entertainment Network (India)

‘Gaana’ acquisition to boost ENIL growth’expand capacities

The acquisition process to take over the business undertaking of Gamma Gaana Ltd, relating to the business of licensing music audio content and hosting and streaming services under the name ‘Gaana’, was completed by Entertainment Network (India). ENIL is promoted by Bennett Coleman, the flagship company of the Times of India group, and operates FM radio broadcasting stations in 63 Indian cities. It operates India’s no. 1 radio channel Mirchi and is engaged in revitalizing the brand and the product to enhance Mirchi’s digital offerings to its audience. “This acquisition is an important step towards turning around ENIL’s digital story,” said CEO of ENIL Yatish Mehrishi.

This was led by robust demand in FCT (free commercial time) driven by high retail activity during the quarter. Non- FCT revenues also experienced a notable surge, reporting a strong revenue growth of 45% yoy. EBITDA stood at Rs 44.3 crore, boasting a 33% margin

and demonstrating a substantial 36.4% yoy improvement, primarily driven by robust topline growth. Maintaining that the company’s commitment to sustainable and profitable growth extends to its international business as well, Mr Mehrishi added that post restructuring, international business has stabilized and is now growing profitably. PAT, excluding digital, was reported at Rs 21.6 crore in Q3FY24 compared to Rs 104 crore in Q3FY23, marking the second consecutive quarter with a positive PAT.

F.C.T. LEADER

According to him, the FCT segment has exceeded industry benchmarks, underscoring its leadership position both in volume and value. In Q3FY24, its revenue marketshare rose to 27.7%, marking a significant improvement of 110 basis points yoy. Excluding digital, the nonFCT segment recorded an impressive 35% yoy growth, with a robust EBITDA margin of 33% at company level. Its digital revenue stands at Rs 11.4 crore, constituting 13% of radio revenues. The company has additionally invested Rs 6.2 crore in the digital segment in this quarter. The digital segment contributed Rs11.4 crore to the revenue, making up 13% of the total radio revenues. Additionally, ENIL invested Rs 6.2 crore, further fortifying its digital presence.

According to him, the international business continues to remain stable and profitable, reporting an EBITDA of over Rs 2.3 crore during the quarter. Maintaining a robust financial position, the balance sheet reflected cash and cash equivalents amounting to Rs 262 crore as of December 31, 2023. The management was thrilled to report a strong quarter with increased radio activity and a fantastic festive season.

Revenue growth has outpaced the industry, demonstrating its leadership position. Over the past two the company saw consistent revenue growth, doubling the industry average and significantly improving profitability. As its current businesses gain momentum, the management is dedicated to future investments.

P.A.T. IN BLACK

For the nine months ended December 2023, PAT, excluding digital, stands at Rs 32.9 crore versus a loss of Rs 2.5 crore. Even including digital, PAT for the 9 months this year stands at Rs 18 crore versus a loss of Rs 18.1 crore. Its balance sheet remains robust with cash and cash equivalents totalling to Rs 262 crore as of December 31, 2023.

According to Mr Mehrishi, government advertisements in Q3 saw an increase in contribution against last year, from 10% to 13%. And in the last quarter, government pricing changed at higher levels. So that also benefited. The company is seeing robust government spends coming from both state and central governments. In quarter 4, government spends will continue deeper till the time the elections get announced. Once the election code of conduct comes in, the election spend will have to be stopped. But this will be only for the time being as advertisements from the government will resume once the elections are over

Mr Mehrishi also revealed that the company is operating the entertainment radio channel frequency in Bahrain following the green signal from Bahrain’s Ministry of Information Affairs. The licence issued to ENIL is for a period of five years in the first instance. ENIL has now started broadcasting Bollywood and South Asian content in Bahrain to address the entertainment preference of Bahrain’s significant South Asian population, including a substantial Indian diaspora.