Entertainment Network Limited: Check out the institutional research report of Q4 result of Entertainment Network Ltd. ENIL’s 4QFY18 was in-line but muted. Revenue declined 3.7% YoY owing to high base and cut in ad volumes.

1. RESULTS REVIEW 4QFY18 24 MAY 2018
Entertainment Network
BUY
BUY with TP of Rs 827 at 30x FY20E FCFE per share.
ENIL is best poised to capture the recovery with its
strong radio footprint. Currently only 35 of its 76
stations contribute to profitability.
Consolidated Financial Summary
Historically ENIL’s margin stood at 31-33% in FY11-16.
▪ Near term outlook is positive led by low base effect,
increase in utilization of new stations and upcoming
elections should provide boosts to ad growth.
Himanshu Shah
himanshu.shah@hdfcsec.com
+91-22-6171-7315 Source: Company, HDFC sec Inst Research
HDFC securities Institutional Research is also available on Bloomberg HSLB <GO> & Thomson Reuters
(Rs mn) 4QFY18 4QFY17 YoY (%) 3QFY18 QoQ (%) FY16 FY17 FY18 FY19E FY20E
Net Sales 1,594 1,655 (3.7) 1,484 7.4 5,086 5,565 5,379 6,277 7,182
EBITDA 354 352 0.6 356 (0.6) 1,585 1,259 1,161 1,663 1,973
APAT 145 128 13.1 136 6.3 1,062 533 390 595 705
Diluted EPS (Rs) 3.0 2.7 13.1 2.9 6.3 22.3 11.2 8.2 12.5 14.8
P/E (x) 29.3 58.3 79.6 52.2 44.1
EV / EBITDA (x) 19.6 24.6 26.1 18.7 15.2
RoE (%) 14.0 6.4 4.5 6.5 7.3
INDUSTRY MEDIA
CMP (as on 24 May 2018) Rs 651
Target Price Rs 827
Nifty 10,514
Sensex 34,663
KEY STOCK DATA
Bloomberg ENIL IN
No. of Shares (mn) 48
MCap (Rs bn) / ($ mn) 32/463
6m avg traded value (Rs mn) 35
STOCK PERFORMANCE (%)
52 Week high / low Rs 1,008/613
3M 6M 12M
Weak end to feeble year
ENIL’s 4QFY18 was in-line but muted. Revenue Key highlights
declined 3.7% YoY owing to high base and cut in ad ▪ Legacy stations weak in FY18: ENIL legacy 35
volumes. EBITDA was flat YoY while APAT was up station’s revenue declined 12.5% (volumes -15%, rate
13% (RPAT -15% due to higher tax). +3%) in FY18 leading to 24% drop in EBITDA. This was
ENIL registered healthy revenue, EBITDA and due to economic slowdown, curb on advertising
earnings CAGR of 14/15/17% over FY13-16, despite minutes/hour by ENIL and issue with a client. With
zero inventory addition. Over FY16-18, ENIL’s majority of the issue behind ENIL, we expect legacy
operational stations expanded from 35 to 52. Yet, stations to register ~9% growth in FY19.
its revenue, EBITDA and PAT grew by 3/-14/-39% ▪ New stations drive growth: Decline in old stations
CAGR. This is primarily owing to economic was offset by growth in 17 new stations (Phase III,
slowdown and company specific issues in FY18. batch 1) launched in 2HFY17. Their revenue increased
Launch of new stations accentuated the decline. from Rs 0.25bn to Rs 0.73bn (14% of Consol). EBITDA
Led by economic tailwinds, higher utilization and loss declined from Rs 0.3bn to Rs 20mn. These
price increases in established stations, low base stations would be one of the key earning drivers as
effect and as new stations start contributing we their utilization improves from current 20-25%. We
Absolute (%) (5.4) (15.8) (10.6) expect ENIL to register healthy revenue and earning thus expect ENIL’s margin to expand from historic low
Relative (%) (7.0) (18.7) (25.0) CAGR of 15% and 34% from FY18-20E. of ~21% in FY18 to 27% in FY20 and to 31% by FY23E.
SHAREHOLDING PATTERN (%)
Promoters 71.2
FIs & Local MFs 12.4
FPIs 8.8
Public & Others 7.6
Source : BSE

2. ENIL : RESULTS REVIEW 4QFY18
Page | 2
Quarterly Financial Snapshot
4QFY17 1QFY18 2QFY18 3QFY18 4QFY18
% chg
YoY
% chg
QoQ
FY16 FY17 FY18
% chg
FY17/
FY16
% chg
FY18/
FY17
Revenue 1,655 1,044 1,257 1,484 1,594 (3.7) 7.4 5,086 5,565 5,379 9.4 (3.3)
Programming 73 64 63 70 77 4.4 9.6 179 255 273 42.6 7.2
License fee 94 80 87 88 92 (2.0) 4.5 262 334 347 27.4 4.0
Employee cost 246 312 322 261 290 18.3 11.2 938 1,054 1,185 12.3 12.5
Mktg exps 476 107 182 343 461 (3.2) 34.2 997 1,294 1,093 29.8 (15.5)
Other exps 414 314 319 366 320 (22.6) (12.5) 1,125 1,370 1,319 21.8 (3.7)
Total Opex 1,303 877 973 1,128 1,240 (4.8) 9.9 3,502 4,306 4,218 23.0 (2.0)
EBITDA 352 167 284 356 354 0.6 (0.6) 1,585 1,259 1,161 (20.6) (7.8)
Depreciation 164 156 159 161 158 (3.5) (1.6) 361 536 635 48.6 18.4
Finance costs 50 12 13 12 10 (80.5) (21.4) 0 136 47 na (65.3)
Other Income 52 29 23 19 29 (45.3) 49.9 349 203 99 (41.9) (51.1)
PBT 190 27 136 202 214 13.1 6.3 1,573 790 578 (49.8) (26.8)
Tax 49 23 75 70 96 95.7 36.8 488 238 264 (51.2) 11.2
RPAT 140 3 61 131 118 (15.9) (10.0) 1,085 552 314 (49.2) (43.1)
APAT 128 (24) 91 136 145 13.1 6.3 1,062 533 348 (49.8) (34.7)
Cash PAT
(RPAT+Dep)
305 160 220 292 277 (9.2) (5.4) 1,446 1,088 948 (24.8) (12.8)
As % of revenue 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18
chg YoY
(bps)
chg
QoQ
(bps)
FY16 FY17 FY18
chg YoY
(bps)
chg YoY
(bps)
Programming 4.4 6.1 5.0 4.7 4.8 37 10 3.5 4.6 5.1 107 50
License fee 5.7 7.7 6.9 5.9 5.8 10 (16) 5.1 6.0 6.5 85 46
Employee cost 14.8 29.9 25.6 17.6 18.2 338 63 18.4 18.9 22.0 48 310
Mktg exps 28.8 10.2 14.5 23.1 28.9 14 578 19.6 23.3 20.3 364 (293)
Other exps 25.0 30.1 25.4 24.7 20.1 (493) (456) 22.1 24.6 24.5 249 (9)
Total Opex 78.7 84.0 77.4 76.0 77.8 (95) 178 68.8 77.4 78.4 854 104
EBITDA 21.3 16.0 22.6 24.0 22.2 95 (178) 31.2 22.6 21.6 (854) (104)
Depreciation 9.9 15.0 12.6 10.8 9.9 2 (91) 7.1 9.6 11.8 254 216
Finance costs 3.0 1.2 1.0 0.8 0.6 (243) (23) 0.0 2.4 0.9 243 (156)
Other Income 3.2 2.8 1.8 1.3 1.8 (137) 51 6.9 3.6 1.8 (322) (180)
PBT 11.5 2.6 10.8 13.6 13.4 199 (14) 30.9 14.2 10.8 (1,673) (344)
Tax 3.0 2.2 5.9 4.7 6.0 306 130 9.6 4.3 4.9 (531) 64
PAT 8.5 0.3 4.8 8.9 7.4 (107) (144) 21.3 9.9 5.8 (1,142) (408)
Tax as % of PBT 25.9 87.6 55.0 34.9 44.9 1,894 1,001 31.0 30.1 45.7 (87) 1,560
Source: Company, HDFC sec Inst Research
ENIL’s 4QFY18 revenue
decline is owing to high base
effect (4QFY17 +13%, 4QFY16
+18%), cut in ad volumes to
improve listenership and past
issues with government as a
client which stands resolved
but recovery is slow
Decline in other expenses
QoQ/YoY owing to write back
of provisions on collections
improvement. ENIL prudently
provides for 180 days plus
outstanding and on
collections the provision is
reversed

3. ENIL : RESULTS REVIEW 4QFY18
Page | 3
Consolidated Financial Performance
1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 FY16 FY17 FY18
Overall
Revenue 1,108 1,296 1,506 1,655 1,044 1,257 1,484 1,594 5,086 5,565 5,379
% chg YoY 9.0 11.5 4.9 12.4 (5.8) (3.0) (1.5) (3.7) 16.0 9.4 (3.3)
EBITDA 294 231 381 352 167 284 356 354 1,585 1,259 1,161
EBITDA Margin
%
26.6 17.8 25.3 21.3 16.0 22.6 24.0 22.2 31.2 22.6 21.6
% chg YoY (16.8) (39.0) (18.5) (8.2) (43.3) 22.8 (6.6) 0.6 9.1 (20.6) (7.8)
PAT 165 78 162 128 18 91 136 145 1,062 533 390
PAT Margin % 14.9 6.0 10.8 7.7 1.7 7.3 9.2 9.1 20.9 9.6 7.3
% chg YoY (39.1) (69.1) (46.6) (45.6) (89.1) 17.3 (16.0) 13.1 0.2 (49.8) (26.8)
Legacy stations
Revenue 1,108 1,296 1,410 1,495 937 1,116 1,270 1,327 5,086 5,310 4,650
% chg YoY 9.0 11.5 (1.8) 1.6 (15.4) (13.9) (10.0) (11.3) 16.0 4.4 (12.4)
EBITDA 371 329 444 415 210 302 345 324 1,585 1,559 1,181
EBITDA Margin
%
33.5 25.4 31.5 27.8 22.4 27.0 27.2 24.5 31.2 29.4 25.4
% chg YoY 4.7 (13.3) (5.0) 8.3 (43.2) (8.4) (22.4) (21.8) 9.1 (1.6) (24.2)
New stations
Revenue - - 96 159 106 142 214 267 - 256 729
EBITDA (76) (98) (63) (63) (44) (18) 11 30 - (300) (20)
Reduced losses in new
stations lead to modest
decline in EBITDA
Steep decline in legacy
stations EBITDA owing to
decline in utilization as ENIL
curb advertising
minutes/hour (volumes -15%)
and offset the same through
price increases (+3%)
Industry peers witnessed a
pric•e decline of 7-13%

4. ENIL : RESULTS REVIEW 4QFY18
Page | 4
Revenue trend EBITDA trend
1,750
1,550
1,350
1,150
950
750
Revenue (Rs Mn) chg YoY (%) - RHS
25.0
20.0
15.0
10.0
5.0
-
(5.0)
(10.0)
500
400
300
200
100
-
EBITDA (Rs Mn) chg YoY (%) - RHS
25.0
15.0
5.0
(5.0)
(15.0)
(25.0)
(35.0)
(45.0)
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research
EBITDA margin trend APAT trend
%
35.0
30.0
25.0
20.0
15.0
34.9
350
300
250
200
150
100
50
-
RPAT (Rs Mn) chg YoY (%) - RHS
25.0
-
(25.0)
(50.0)
(75.0)
(100.0)
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research
32.6
32.6
26.6
25.3
26.0 24.0
22.6
21.3 22.2
17.8 16.0
ENIL’s revenue is down for 4th
consecutive quarter, EBITDA
has declined in 7 out of 8
quarters and RPAT is down for
10th quarter
Multitude of factors has lead
to sub-par performance of
ENIL over FY16-18 such as (a)
economic slowdown on
account of GST, RERA,
demonetization etc (b)
operating losses on seventeen
new stations launches,
associated depreciation and
interest costs (c) issue with
government client in 1Q and
3QFY18 etc (d) ENIL is
strategically reducing
inventory to improve
listenership. This reset is
leading to volatility in
growth.
•
1QFY161QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18

5. ENIL : RESULTS REVIEW 4QFY18
Page | 5
Revenue trend EBITDA trend
10,000
8,000
6,000
4,000
2,000
Revenue (Rs Mn) chg YoY (%) - RHS
20.0
15.0
10.0
5.0
-
(5.0)
3,000
2,500
2,000
1,500
1,000
500
EBITDA (Rs Mn) chg YoY (%) - RHS
50.0
40.0
30.0
20.0
10.0
-
(10.0)
(20.0)
(30.0)
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research
EBITDA margin trend FCF
%
35.0
32.0
29.0
26.0
23.0
20.0
2,250
2,000
1,750
1,500
1,250
1,000
750
500
250
-
FCF (Rs Mn)
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research
33.1
31.5
32.5
31.2 30.7
29.7
30.8
27.5
26.5
22.6
21.6
EBITDA margin to improve
from FY18 lows of 22% to 27%
in FY20E and 31% by FY23E
ENIL’s FCF generation is set to
increase from current Rs
0.8bn p.a. in FY18 to ~Rs
1.3bn in FY20 and Rs 2-2.2bn
by FY23E
FY13FY13
FY14FY14
FY15FY15
FY16FY16
FY17
FY18
FY19E
FY20E
FY21E
FY22E
FY23E
FY17
FY18
FY19E
FY20E
FY21E
FY22E
FY23E
FY13
FY14
FY15
FY16
FY17
FY14
FY15
FY16
FY17
FY18
FY19E
FY20E
FY21E
FY22E
FY23E
FY18
FY19E
FY20E
FY21E
FY22E
FY23E

6. Page | 6
ENIL : RESULTS REVIEW 4QFY18
Key operating assumptions
FY18E FY19E FY20E FY21E FY22E FY23E
No of stations
- established 35 35 35 35 35 35
- Phase 3, Batch 1 17 17 17 17 17 17
- Phase 3, Batch 2 21 21 21 21 21 21
- Ishq FM - 3 3 3 3 3
Total 73 76 76 76 76 76
Inventory Available (mn 10 sec slots)*
- established 17.0 17.0 17.0 17.0 17.0 17.0
- Phase 3, Batch 1 6.8 6.3 6.3 6.3 6.3 6.3
- Phase 3, Batch 2 - 7.8 7.8 7.8 7.8 7.8
- Ishq FM - 0.7 1.5 1.5 1.5 1.5
Total 23.8 31.9 32.6 32.6 32.6 32.6
Inventory Sold (mn 10 sec slots)*
- established 13.1 13.7 13.5 13.8 14.0 14.2
- Phase 3, Batch 1 1.5 1.9 2.3 2.9 3.4 3.9
- Phase 3, Batch 2 - 0.3 1.7 2.6 3.4 4.2
- Ishq FM - 0.4 1.0 1.0 1.1 1.1
Total 14.6 16.3 18.5 20.4 21.9 23.4
Inventory Sold (% chg YoY)
- established 4.2 (1.0) 2.3 1.2 1.2
- Phase 3, Batch 1 28.9 24.4 21.6 17.8 15.1
- Phase 3, Batch 2 - 483.3 54.3 29.6 22.9
- Ishq FM - 114.8 7.3 5.7 5.4
Total 11.8 13.8 9.8 7.5 6.9
Utilization %
- established 77.2 80.5 79.7 81.5 82.5 83.5
- Phase 3, Batch 1 21.5 29.8 37.0 45.0 53.0 61.0
- Phase 3, Batch 2 - 3.8 21.9 33.8 43.8 53.8
- Ishq FM - 60.8 65.3 70.0 74.0 78.0
Average 61.2 51.1 56.8 62.4 67.1 71.7
ENIL’s revenue to grow at
13% CAGR over FY18-23
primarily led by improved
utilization in its new stations
~70% of the incremental
revenue to be contributed by
new stations and Ishq FM .
Share of new stations and
Ishq FM to increase to 26% in
FY23 from 13% in FY18E.
A higher than expected
growth remains could be
additional upside

7. Page | 7
ENIL : RESULTS REVIEW 4QFY18
FY18E FY19E FY20E FY21E FY22E FY23E
Realization/slot/station (Rs)
- established 354 372 390 405 417 430
- Phase 3, Batch 1 517 543 580 602 619 637
- Phase 3, Batch 2 - 140 142 150 159 168
- Ishq FM - 300 314 345 372 400
Average 370 385 387 397 406 416
Realization/slot/station (% chg YoY)
- established 5.0 5.0 3.8 3.0 3.0
- Phase 3, Batch 1 5.1 6.9 3.8 2.9 2.9
- Phase 3, Batch 2 - 0.8 6.3 5.8 5.9
- Ishq FM - 4.7 10.0 7.8 7.6
Average 4.0 0.5 2.4 2.3 2.5
Revenue (Rs Mn)
- established 4,641 5,079 5,279 5,605 5,844 6,092
- Phase 3, Batch 1 756 1,025 1,362 1,719 2,083 2,467
- Phase 3, Batch 2 - 41 243 398 546 710
- Ishq FM - 132 298 352 401 455
Total 5,397 6,277 7,182 8,074 8,873 9,723
Revenue (% chg YoY)
- established 9.4 4.0 6.2 4.3 4.2
- Phase 3, Batch 1 35.5 32.9 26.2 21.2 18.4
- Phase 3, Batch 2 - 487.8 64.1 37.1 30.0
- Ishq FM - 124.9 18.0 14.0 13.4
Total 16.3 14.4 12.4 9.9 9.6
Source: HDFC Sec Institutional Research

8. Page | 8
ENIL : RESULTS REVIEW 4QFY18
New Old Change in % / bps
FY19 FY20 FY19 FY20 FY19 FY20
Revenue (Rs Mn) 6,277 7,182 6,277 7,182 (0.0) (0.0)
EBITDA (Rs Mn) 1,663 1,973 1,663 1,973 (0.0) (0.0)
EBITDA Margin (%) 26.5 27.5 26.5 27.5 (0) (0)
PAT (Rs Mn) 595 705 560 692 6.3 1.9
l
CMP TP +/- % Rating
P/E (x) EV/EBTDA (x) P/FCFE (x) P/B (x) Core ROCE (%)
FY18E FY19E FY20E FY18E FY19E FY20E FY18E FY19E FY20E FY18E FY19E FY20E FY18E FY19E FY20E
ENIL 651 827 26.8 BUY 79.6 52.2 44.1 26.1 18.7 15.2 42.5 (39.6) 23.7 3.5 3.3 3.2 3.4 6.7 7.7
MBL 342 492 43.7 BUY 37.7 27.9 22.5 18.1 14.0 11.4 71.7 27.3 20.9 3.3 3.0 2.8 12.0 15.4 18.8
Increase in our PAT estimate
is due to marginal drop in
D&A and higher other income
Change in estimates
Source: HDFC Sec Inst Research
Valuation Snapshot: ENIL and MBL
FY18 FY19E FY20E FY21E FY22E FY23E
In the medium-to-long term ENIL*
we expect both MBL and ENIL FCFE (Rs Mn) 712 806 1,314 1,622 1,873 2,152
to deliver similar stock returns Target Multiple (x) 30 30 30 30 30 30
Implied Mcap (Rs Mn) 21,350 24,195 39,424 48,657 56,189 64,567
Implied TP (Rs) 448 508 827 1,021 1,179 1,354
Upside to CMP (%) (31.3) (22.2) 26.8 56.5 80.8 107.7
MBL
In short term MBL can FCFE (Rs Mn)** 272 964 935 987 1,298 1,346
outperform ENIL Target Multiple (x) 30 30 30 30 30 30
Implied Mcap (Rs Mn) 8,162 28,926 28,049 29,604 38,939 40,381
Implied TP (Rs) 143 507 492 519 682 708
Upside to CMP (%) (58.2) 48.2 43.7 51.7 99.6 106.9
Source: HDFC Sec Inst Research
* We have added back Rs 1.7bn
Kolkata station of Anand Offset
** MBL’s FY18 FCF is subdued o
Valuation Summary
Source: HDFC Sec Inst Research
in FCF of ENIL to be paid towards acquisiti
in FY19E
wing to Rs 390mn increase in working capi
on
ta
of Ishq FM stations an
on acocunt of receiva
d Rs 250mn in MBL for acquisiti
bles as also decline in Payables
on of

9. Page | 9
ENIL : RESULTS REVIEW 4QFY18
Income Statement (Consolidated) Balance Sheet (Consolidated)
Year ending March (Rs mn) FY16 FY17 FY18 FY19E FY20E As at March (Rs mn) FY16 FY17 FY18 FY19E FY20E
Net Sales 5,086 5,565 5,379 6,277 7,182 SOURCES OF FUNDS
Growth (%) 16.0 9.4 (3.3) 16.7 14.4 Share Capital 477 477 477 477 477
Program & Loyalty exp 179 255 273 314 377 Reserves 7,608 8,097 8,398 8,887 9,385
License fee 262 334 347 373 418 Total Shareholders Funds 8,084 8,574 8,875 9,364 9,861
Employee cost 938 1,054 1,185 1,326 1,432 Long Term Debt - - - - -
Mktg exps 997 1,294 1,093 1,181 1,275 Short Term Debt 2,501 1,232 1,040 1,144 915
Other exps 1,125 1,370 1,319 1,421 1,707 Total Debt 2,501 1,232 1,040 1,144 915
Total Operating Cost 3,502 4,306 4,218 4,614 5,209 Other Non current liabilities 131 185 333 383 440
EBIDTA 1,585 1,259 1,161 1,663 1,973 TOTAL SOURCES OF FUNDS 10,716 9,990 10,247 10,890 11,216
EBIDTA (%) 31.2 22.6 21.6 26.5 27.5 APPLICATION OF FUNDS
EBIDTA Growth (%) 9.1 (20.6) (7.8) 43.2 18.6 Net Block 7,275 7,795 7,356 8,755 8,071
Depreciation 361 536 635 750 884 Other Non current assets 404 300 460 480 500
EBIT 1,224 723 526 912 1,089 Non Current Assets 7,678 8,095 7,815 9,235 8,571
Interest 0 136 47 104 109 Trade Receivables 1,403 1,622 1,702 1,781 2,057
Other Income 349 203 99 80 73 Other Current Assets 179 307 234 268 324
PBT 1,573 790 578 888 1,052 Current Assets 1,582 1,928 1,936 2,049 2,380
Tax 488 238 264 293 347 Trade Payables 800 1,116 1,049 1,116 1,333
EO loss/(gain) - - (42) - - Other Current Liabilities 303 272 284 349 389
RPAT 1,085 552 356 595 705 Current Liabilities 1,103 1,388 1,333 1,465 1,722
APAT 1,062 533 390 595 705 Net current Assets 479 540 603 583 659
APAT Growth (%) 8.8 (49.8) (26.8) 52.4 18.5 Cash & Equivalents 2,559 1,355 1,828 1,072 1,987
AEPS 22.3 11.2 8.2 12.5 14.8 TOTAL APPLICATION OF FUNDS 10,716 9,990 10,247 10,890 11,216
EPS Growth (%) 8.8 (49.8) (26.8) 52.4 18.5 Source: Company, HDFC sec Inst Research
Source: Company, HDFC sec Inst Research

10. Page | 10
ENIL : RESULTS REVIEW 4QFY18
Cash Flow (Consolidated) Key Ratios
Year ending March (Rs mn) FY16 FY17 FY18 FY19E FY20E FY16 FY17 FY18E FY19E FY20E
PAT from Operations 1,085 552 356 595 705 PROFITABILITY (%)
Interest 0 136 47 104 109 GPM 96.5 96.5 95.4 94.9 95.0
Depreciation 361 536 635 750 884 EBITDA Margin 33.1 31.2 22.6 21.6 26.5
Working Capital Change (151) (61) (63) 20 (75) EBIT Margin 25.6 24.1 13.0 9.8 14.5
OPERATING CASH FLOW ( a ) 1,295 1,162 975 1,469 1,623 APAT Margin 22.3 20.9 9.6 7.3 9.5
Capex (7,105) (1,056) (195) (2,150) (200) RoE 15.2 14.0 6.4 4.5 6.5
Free Cash Flow (5,810) 106 779 (681) 1,423 Core ROCE 63.4 18.1 6.0 3.4 6.7
Investments & Others (24) 157 (11) 30 37 RoCE 12.6 9.5 4.9 2.8 5.8
INVESTING CASH FLOW ( b ) (7,129) (899) (207) (2,120) (163) EFFICIENCY
Capital Issuance 1 (6) 1 - (0) Tax Rate (%) 26.7 31.0 30.1 45.7 33.0
Debt Issuance 2,498 (1,269) (192) 104 (229) Asset Turnover (x) 8.3 0.7 0.7 0.7 0.7
Interest (0) (136) (47) (104) (109) Debtors (days) 104 101 106 115 104
Dividend (56) (56) (56) (105) (208) Payables (days) 62 57 73 71 65
FINANCING CASH FLOW ( c ) 2,442 (1,467) (295) (105) (546) Cash Conversion Cycle (days) 27 34 35 41 34
NET CASH FLOW (a+b+c) (3,392) (1,203) 473 (756) 914 Debt/EBITDA (x) (4.1) (0.0) (0.1) (0.7) 0.0
Closing Cash 2,559 1,355 1,828 1,072 1,987 Net D/E (0.8) (0.0) (0.0) (0.1) 0.0
Source: Company, HDFC sec Inst Research Interest Coverage 2,613.4 3,409.1 5.3 11.2 8.8
PER SHARE DATA
EPS (Rs/sh) 20.5 22.3 11.2 8.2 12.5
CEPS (Rs/sh) 27.4 29.8 22.4 21.5 28.2
DPS (Rs/sh) 1.0 1.0 1.0 1.0 1.9
BV (Rs/sh) 148.0 169.6 179.9 186.2 196.4
VALUATION
P/E 31.8 29.3 58.3 79.6 52.2
P/BV 4.4 3.8 3.6 3.5 3.3
EV/EBITDA 17.3 19.6 24.6 26.1 18.7
OCF/EV (%) 5.3 4.2 3.8 3.2 4.7
FCF/EV (%) 5.5 (18.7) 0.3 2.6 (2.2)
FCFE/Mcap (%) 4.5 (18.7) (0.1) 2.4 (2.5)
EV/Revenues 5.7 6.1 5.6 5.6 5.0
Dividend Yield (%) 0.2 0.2 0.2 0.2 0.3
Source: Company, HDFC sec Inst Research

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RECOMMENDATION HISTORY
Date CMP Reco Target
20-Apr-18 693 BUY 827
24-May-18 651 BUY 827
Rating Definitions
BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period
1,000
950
900
850
800
750
700
650
600
TPENIL
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18

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