MOSL: SUN TV (Buy)-IPL drives strong earnings growth; upbeat outlook
Sun TV: IPL drives strong earnings growth; upbeat outlook
(SUNTV IN, Mkt Cap USD4.7b, CMP INR827, TP INR1050, 27% Upside, Buy)
- Robust IPL revenue drives EBITDA: SUNTV reported splendid 1QFY19 results, led by a steady growth in ad/subscription revenue (in-line) and a positive surprise from the IPL business. IPL revenue at INR3.9b (INR1.4b in 1QFY18) grew by 1.7x YoY, leading to a robust growth of 42% YoY in standalone revenue to INR11.2b (+56% QoQ, 15% beat). This provided an impetus to the steep growth of 64% YoY (41% QoQ) in EBITDA to INR7.3b (23% beat) and margin expanded by 860bp YoY to 65.6%. Consequently, PAT surged by 63% YoY (17% beat) to INR4.1b. The IPL business turned profitable with a bang - PBT of INR2b v/s -INR225m in 1QFY18 (43% beat), driving margins.
- Ad/subscription revenue records healthy growth: Ad revenue jumped up by 20% YoY to INR3.6b (in-line), mainly on the back of a low base (GST impact). Digitization led to a growth of 21% YoY in DTH revenue and a growth of 4% YoY in cable revenue drove the uptick of 15% YoY in domestic subscription revenue (INR3.1b, in-line)
- Concall highlights: (1) The Tamil Nadu (TN) market still has ~8m analog subscribers who are yet to be digitized (2) Will be launching second GEC channel in TN and Andhra Pradesh (AP) markets (3) Bangla channel to be launched before FY19 end; expected to break-even in 2-3 years (4) IPL revenue expected to grow further from current levels over coming years.
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.
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