Q3FY21 Result Update - Sun TV Network - ICICI Direct

Sun TV's Q3FY21 numbers were mixed as ad recovery was slower and subscription growth was lower than expected but lower amortisation aided PAT. Revenue (standalone) was at Rs. 972.3 crore, up 19.3% YoY boosted by IPL revenue. Ex-IPL revenue was at Rs. 763.3 crore, down 6.3% YoY. Ad revenues at Rs. 309 crore were down 9.4% YoY as ad spend by retail is yet to pick up. Subscription revenues were up ~3% YoY to Rs. 424 crore. EBITDA was at Rs. 600.7 crore, up 3.5% YoY while EBITDA margin at 61.8% was down 944 bps YoY. Margins (Ex-IPL) were 67.2%, down 400 bps YoY. Amortisation expenses were lower due to fewer movie premieres on TV. Consequently, PAT was at Rs. 441.8 crore, up 18.3% YoY.

Valuation & Outlook

Sun TV's ad recovery has been lower compared to its peer. Faster rebound in ad outlook, therefore, will be important. Regaining viewership share for flagship channel and SunNXT growth will also be key for monetisation. IPL profitability, healthy cash balance and steady dividend payout are the positives. We would turn constructive when we witness SunNXT ramp-up, viewership share increase coupled with sustained ad recovery. We maintain HOLD rating on the stock. We value Sun TV at 13x FY23E EPS (same as Zee) to arrive at revised target price of Rs. 570 (vs. earlier TP: Rs. 480).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_SunTV_Q3FY21.pdf

Shares of SUN TV NETWORK LTD. was last trading in BSE at Rs.511.8 as compared to the previous close of Rs. 516.45. The total number of shares traded during the day was 151755 in over 2950 trades.

The stock hit an intraday high of Rs. 529 and intraday low of 508.6. The net turnover during the day was Rs. 78414442.

Source : Equity Bulls

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