Views on Sun TV 3QFY2014 results - Angel Broking

Views of Mr. Amit Patil (Research Analyst - Media, Angel Broking) on Sun TV 3QFY2014 results:

"For 3QFY2014, Sun TV's top-line and bottom-line performance were below our estimates. The company reported subdued 4.6% yoy growth in top-line to Rs. 508cr, primarily on account of 7.2% yoy decline in advertising revenue to Rs. 272cr. Advertising revenue was hit due to transition to new TRAI dispensation which limits ad time to 12 minutes/hour. However, Subscription revenue continued to report robust 27.0 yoy growth to Rs. 167cr.

On the operating front, the company's EBITDA margin contracted by 428bp yoy to 73.6% on account of subdued ad revenues and higher cost of content (up 56% yoy to Rs. 53cr mainly due to multiple non-fiction shows telecasted during the quarter). Consequently, net profit declined by 2.2% yoy to Rs. 186cr (compared to our estimate of Rs. 195cr). We recommend Accumulate on the stock with a target price of Rs. 400."

Source : Equity Bulls

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