Sun TV

10 Feb

Optimistic on Sun NXT – Sun TV

Update on the Indian Equity Market:

On Wednesday, Nifty closed in the red at 15,107. Among the sectoral indices, Realty (+1.6%), Pharma (+0.7%), and IT (+0.4%) closed higher. PVT Bank (-0.7%), Fin Services (-0.2%) and FMCG (-0.1%) closed in the red. Cipla (+2.8%), Bajaj Finserv (+2.8%), and SBI Life (+2.7%) closed on a positive note. Eicher Motors (-2.2%), Bharti Airtel (-1.6%), and HDFC Bank (-1.2%) were among the top losers.

Excerpts from an interview of Mr. SL Narayan, CFO, Sun Group with CNBC-TV18 dated 09th February 2021:

  • The company expects double-digit growth across financials.
  • Narayan said things are looking good since January-21.
  • The advertising revenues are still lagging but the company is in a better position as compared to Q1FY21.
  • The company was impacted more as compared to large peers because of its dependence on local revenues.
  • He said the entire ecosystem is affected and hence there is some impact on the company as well.
  • On Sun NXT, he said the company had a large contract that came up for renewal. However, the negotiations couldn’t be concluded on time and its revenues were not recognized in Q3FY21.
  • Speaking about subscribers for Sun NXT, he said the company is not spending on customer acquisition because they don’t want to build an OTT at a significant upfront investment.
  • Movie releases will bring back the growth in subscription revenues.
  • A lot of new movies will be hitting the screen in coming times.

 

Consensus Estimate: (Source: market screener website)

  • The closing price of Sun TV was ₹ 528 as of 10-February-2021.  It traded at 15x/13x/12x the consensus Earnings per share estimate of ₹ 35.8/39.3/42.3 for FY21E/FY22E/ FY23E respectively.
  • The consensus average target price is ₹ 566/- which implies a PE multiple of 13x on FY23E EPS of 42.3/-.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

 

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16 Dec

Dramatic recovery in advertising revenues – Sun TV

Update on the Indian Equity Market:
On Monday Nifty closed 0.1% higher at 13,568. Among the sectoral indices, Media (+1.8%), Auto (+0.6%), and Metal (+0.8%) closed higher. Nifty PSU Bank (-1.5%), FMCG (-1.3%), and Pharma (-0.2%) closed lower. Bajaj Finance (+5.1%), Bajaj Finserv (+4.2%), and Eicher Motors (+3.1%) closed on a positive note. HUL (-2.1%), Nestle (-2.1%), and BPCL (-1.8%) were among the top losers.

Excerpts from an interview of Mr. SL Narayanan CFO, Sun Group with CNBC-TV18 dated 14th December 2020:

● Mr. Narayanan said the company has dramatic recovery in advertising revenues.
● The recovery on QoQ basis is better but the kind of set back company witnessed in the 1st half of the year the recovery is not that sharp to recover all the deficits.
● He said the subscription will become the mainstay of media companies like Sun Tv.
● 9 years back, the subscription revenues were averaging around Rs 85 crore a quarter which was Rs 340 crore run rate annually. That number has now touched Rs 2,000cr.
● Speaking on infrastructure, he said the company has prepared in the last 3-4 years for streaming.
● The company is investing in more forms of content.
● He said the telecom companies are sourcing content from media companies.
● The company is looking to spend Rs 400 cr on original content and in addition to this, the company will be producing movies.
● The company will also Rs 200 cr for exclusive content on Sun Next.

Consensus Estimate: (Source: market screener and Investing.com websites)
● The closing price of Sun TV was ₹ 500 as of 14-December-2020. It traded at 14x/ 13x/ 12x the consensus Earnings per share estimate of ₹ 35.5/39.1/41.9 for FY21E/ FY22E/ FY23E respectively.
● The consensus average target price for Sun TV is ₹ 523/- which implies a PE multiple of 12x on FY23E EPS of 41.9/-.
Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

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