Sun TV Jumps On Q1 Beat; Movie Business, Viewership Key Drivers
Sun TV also declared an interim dividend of Rs 5 per share for FY2022-23.
Shares of Sun TV Network Ltd. ended with gains on Tuesday after the company first-quarter profit beast estimates.
The regional languages-TV channels operator also declared an interim dividend of Rs 5 per equity share for the financial year 2022-23. The company announced results post market hours on Friday.
Q1 FY23 Results (Standalone, YoY)
Net profit at Rs 491.7 crore against Rs 389.8 crore.
Revenue at Rs 1,193.9 crore versus Rs 810.1 crore.
Ebitda at Rs 763.8 crore against Rs 495 crore.
Ebitda margin at 63.98% versus 61.1%.
Shares of the company rose as much as 5% in intraday trade before closing with nearly 2% gains, while the benchmark Sensex ended with 0.65% gains.
Trading volume was nearly thrice times the 30-day average, when markets closed. Share price crossed the 200-day simple moving average, indicating potential upward price momentum. The relative strength index of the stock is at 71, suggesting it may be overbought.
Of the 19 analysts tracking the company, 14 maintain 'buy', four suggest 'hold' and one recommends 'sell', according to Bloomberg data. The 12-month consensus price target implies an upside of 13.6%.
Analysts said the recovery in the movie business, improvement in viewership share, and high valuations of its IPL team in the recently concluded auctions as positive triggers for the company.
Here's a gist of the brokerages' view on the company's earnings.
Motilal Oswal
Reiterates 'buy' and hikes target to Rs 550 from Rs 500, an implied upside of 15.26%
Q1 performance was healthy despite weakness in ad revenue growth.
Higher contribution from movie business is a positive factor.
Loss in market share and delayed OTT investments remain key concerns.
Upbeat valuation in the auction of new IPL teams makes the stock's valuation compelling.
Expects Sun TV to maintain growth momentum in viewership.
Raises FY2022-23 EPS estimate by 4% and factors in 6% CAGR over FY22-24.
Emkay
Reiterates 'hold' and maintains target price at Rs 470, an implied downside of 1.51%.
Believes that Sun TV's ad revenue print was better than Zee Entertainment due to improved ad spends by regional advertisers, improvement in viewership share in Tamil and lack of FTA channel-linked impact.
Strong theatrical revenue from Tamil movie 'Beast' aided movie production segment while weak performance by its IPL team weighed on revenue.
Expects sustained recovery in ad revenue due to improved spends and stable market share in Tamil.
ICICI Direct
Reiterates 'hold' and maintains target price at Rs 460.
Q1 performance was strong from earnings/margin front.
Believes that overall viewership share improvement is a positive trigger.
Expects recovery in Tamil/Telugu/Kannada markets in the upcoming quarters.
See the ramp up in SunNXT content is a positive as the company lags in spending on OTT.
Source: Exchange filing, Brokerage notes, Bloomberg