Sun TV Network Ltd - Company Report - Maximus Securities Research

- Sun TV is the second largest Television Broadcaster in India operating Satellite Television Channels across four languages of Tamil, Telugu, Kannada and Malayalam and presently airing FM radio stations across India.

- The Group also operates television channels to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada.

- The Group's flagship channel is Sun TV. The other major satellite channels of the Group are Surya TV, Gemini TV and Udaya TV.

- The FM Radio broadcasting is done at Chennai, Coimbatore and Tirunelveli. The Group's film production/distribution division 'Sun Pictures' undertakes production/distribution of movies in Tamil language.

- During the current year, the Group acquired license to operate an Indian Premier League ('IPL') franchise in the city of Hyderabad from the Board of Control for Cricket in India ('BCCI').

- Kal Radio Limited (KRL) a subsidiary of Sun TV Network operates 18 Frequency Modulation ('FM') stations in South India.

- The Group, through its another subsidiary South Asia FM Limited (SAFML) has entered into a strategic tie-up with Red FM Group to further its FM Radio broadcasting business in the North, West and East Indian markets. As part of the transaction, SAFML has taken up a 48.9% beneficial interest in the Red FM Radio Companies by acquiring the equity of their holding Companies at par.

Valuation: Second quarter results of Sun TV Network were subdued due to the fall in the advertisement revenue resulting from the mandatory advertisement time slot ceiling. But considering its excellent performance in the subscription segment, the digitization drive, advertisement price hikes taken to counter the ceiling and its dominance as the market leader in the South, we give Sun TV Network a BUY rating with a price target of Rs. 470/share which is 20.1x its FY15E EPS.

Source : Equity Bulls

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