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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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18 Sep

Expects ALTBalaji to break even in Q4 – Balaji Telefilms

Update on the Indian Equity Market:

On Thursday, Nifty ended 0.7%, lower than the previous close at 11,519. The top gainers for Nifty 50 were Dr Reddy (+4.2%), HCL Tech (+2.3%), and Zee (+2.3%) while the losing stocks were Hindalco (-4.3%), Tata Motors (-2.5%), and Shree Cement (-2.4%). The sectoral gainers for the day were Pharma (+0.4%), Media (+0.4%), and IT (+0.2%) while the losers were Realty (-1.7%), Metal (-1.4%), and PSU Bank (-1.2%).

Edited excerpts of an interview with Mr Nachiket Pantvaidya, Group Chief Operating Officer at Balaji Telefilms and CEO ALTBalaji; dated 16th September 2020 from CNBC TV18:

• Proactive cost control measures implemented by Balaji Telefilms helped them stem their losses in the lockdown quarter. Their OTT platform, ALTBalaji remains one of the top 5 paid apps in the country.
• Pre COVID, the company was expecting ALTBalaji’s breakeven to happen in October, November and December this year, but as the production schedules were delayed because of the pandemic impact, now it is looking to breakeven in January, February and March in 2021.
• 1Q has been challenging for the Company as all content production activity came to stop.
• In terms of growth, the same quarter last financial year the Company had a direct revenue stream of 6.7 crores that has grown to 12 crores in this quarter so ALTBalaji is doubling its direct subscription.
• The Company is seeing a very good trajectory for ALTBalaji especially because tier II and tier III markets have opened up during the pandemic and that has got them a whole lot of new subscribers without having to spend a lot of marketing money to acquire.
• The acquisition pace will be very high because now the markets have opened up, according to Mr Pantvaidya.
• He added that the real question is that can the Company retain the acquired subscribers, will they churn out and the reason why he is putting that out-front is that if the Company has to produce new shows for these subscribers to be on the platform. Therefore the race is on for the Company to produce more and more shows.
• The Company is confident that it will launch close to 25 shows in the remaining part of the year starting this month itself which is probably 50% more than a usual clip.

Consensus Estimate: (Source: market screener website & investing.com)
• The closing price of Balaji Telefilms Ltd was ₹ 77/- as of 17-September-2020. The company reported a loss of Rs 5.8/- per share for FY20.
• The consensus target price of ₹ 100/-. The consensus earnings estimate are not available.

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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