Sun TV Network - Q1FY21 Result Update - ICICI Securities

Sun TV's Q1FY21 numbers were on expected lines as ad revenue fell sharply due to lockdown and subscription revenues continued their growth momentum. Also, absence of IPL led to lower revenues YoY. Profitability was lower as higher amortisation expenses were reported. Advertisement revenues fell sharply 65.8% YoY to Rs. 126 crore, as corporate ad spend was significantly down during Covid-19 led lockdown. Subscription revenues were up 17.6% YoY. EBITDA was at Rs. 416.5 crore with margin of 68.7%. Higher other income was reported at Rs. 108.6 crore due to MTM gains on investments and tax refund. PAT at Rs. 282.8 crore, was down 25.9% YoY.

Valuation & Outlook

The Covid-19 outbreak badly affected the ad scenario and creation of fresh content. Ad flow witnessed some recovery. Its trend will be important, going forward. Among key positives, fresh content is being telecast across all channels with gains in viewership. We expect Sun TV to capitalise on the viewership gains once ad scenario normalises. IPL is scheduled to be held in Q2, Q3, assuring some more earnings protection. Focus on ramping up SunNXT is also a step in the right direction. The company has cash balance of Rs. 3000 crore+. We expect it to maintain a healthy dividend payout. We maintain our BUY recommendation with a target price of Rs. 490/share (12x FY22E EPS).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_SunTV_Q1FY21.pdf

Shares of SUN TV NETWORK LTD. was last trading in BSE at Rs.425.85 as compared to the previous close of Rs. 400.2. The total number of shares traded during the day was 857532 in over 16402 trades.

The stock hit an intraday high of Rs. 440.2 and intraday low of 408.15. The net turnover during the day was Rs. 369045240.

Source : Equity Bulls

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