MOSL: SUN TV (Neutral)-Ad growth disappoints, volumes recovery a quarter away-Maintain EPS and TP
​Sun TV: Ad growth disappoints, volumes recovery a quarter away; Maintain EPS and TP
(SUNTV IN, Mkt Cap USD4.8b, CMP INR808, TP INR860, 6% Upside, Neutral)
- Revenue misses estimate largely led by ad miss: 4QFY17 PAT was flat YoY at INR2.36b (est. of INR2.46b). The PAT miss was lower than the operational miss, as lower depreciation, higher-than-expected other income and lower tax outgo partially cushioned the EBITDA disappointment. Revenue of INR5.82b (+3% YoY/-1% QoQ) came in 5% below our estimate of INR6.12b, primarily due to lower-than-expected ad revenue and digital cable revenue.
- Demon continues to hurt ad volumes; subscription misses estimate too: Ad inventory consumption continued to take a beating from demonetization as advertisers across categories were yet to loosen their purses. This, coupled with SUNTV's focus of improving ad yields, kept pressure on ad volumes. Since the note-ban drive, SUNTV is estimated to have lost ~2.5-2.7m seconds in ad volumes. Ad & broadcast revenue fell ~7% YoY to INR2.92b (est. of INR3.16b). Subscription revenue grew 13% YoY/1% QoQ to INR2.44b (3% below est. of INR2.51b). Cable declined 3% QoQ to INR0.73b (est. of INR0.81b), while DTH grew 2.4% QoQ to INR1.71b (in-line).
Sun TV Network Limited. Sun TV Network Limited is engaged in providing broadcasting services. The Company operates through Media and Entertainment segment. Its geographical segments include India and Others. It is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India. It operates television channels in approximately four South Indian languages to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, the United Kingdom, Europe, the Middle East, the United States, Australia, South Africa and Canada. It operates Sun TV channel. Its other satellite channels are Surya TV, Gemini TV and Udaya TV. It is also into the business of frequency modulation (FM) radio broadcasting at Chennai, Coimbatore and Tirunelveli. It also has the license to operate an Indian Premier League franchise Sun Risers Hyderabad. It has presence across various genres, such as general entertainment, movies, music, news, kids, action and life.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.