SUN TV Network - 4QFY2012 Result Update - Angel Broking

For 4QFY2012, SUN TV (STNL) reported a decline in its top-line and bottom-line. The company's top-line declined by 7.3% yoy to Rs.427cr. OPM contracted by 216bp yoy to 76.9%. Consequently, Net Profit posted sharp decline of 23.7% yoy to 159cr.

Key highlights of the quarter: STNL posted a decline in its top-line due to an 8.9% yoy fall in advertising revenues to Rs.235cr and a loss of cable revenues from Tamil Nadu. The omission of Sun TV channel bouquet from Arasu Cable TV has impacted the cable revenues. However, the DTH segment grew by 4.9% yoy and contributed Rs.86cr to the top line. The increase in other expenditure by 37.6% to Rs.32cr led to OPM contraction. On the earnings front, STNL reported a sharp decline in profit due to higher base as as Endhiran had contributed ~Rs.23cr in 4QFY2011.

Outlook and valuation: The continued loss of analog revenues from Tamil Nadu and the expected delay in digitalization in Chennai remains matter of concern. Accordingly, we believe the stock price would remain range-bound. At the CMP, STNL is trading at 10.3x FY2014E consolidated EPS of Rs.22.1. We maintain our Neutral view on the stock.

Source : Equity Bulls

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