CRISIL reaffirms rating on bank facilities of Music Broadcast Ltd

CRISIL has reaffirmed its 'CRISIL AA/stable/CRISIL A1+' ratings on the bank facilities of Music Broadcast Ltd (MBL). The ratings continue to reflect MBL's strong market position in the radio industry, healthy financial risk profile and established managerial, operational and financial linkages with the parent. These strengths are partially offset by susceptibility to intense competition and economic activity in the FM radio broadcasting industry.

CRISIL also added that the radio industry's revenue is expected to decline by 22 to 25 per cent in the fiscal year 2021 because of the impact of the novel Coronavirus pandemic.

Advertisement revenue has a high correlation with economic growth. While listenership has improved since the nationwide lockdown has been imposed; the expected weak economic activity has led to a significant drop in players' advertising revenue, which in the past rebounded sharply when economic growth had recovered. Revenue should gradually recover from the second quarter of the fiscal 2021 onwards, with expectations of full recovery in the fiscal 2022. MBL's credit risk profile remains strong due to its market position, healthy liquidity of over Rs 215 crore as on March 31, 2020, nil debt and high financial flexibility.

The stock closed at 13.52, down by 1.39 per cent or Rs 0.19 per share. The intraday high is Rs 14.55 and intraday low is Rs 13.30. The 52-week high is Rs 49.88 and 52-week low is Rs 12.30 on BSE.