Sun TV's Q4FY20 numbers were better-than-expected on an operational basis while profitability was lower on account of higher amortisation charges. Advertisement revenues fell 14.5% YoY to Rs. 291 crore, primarily impacted by a weak economic environment and Covid-19 outbreak in March. Subscription revenues, however, saw robust growth of 24.7% YoY. EBITDA at Rs. 503.5 crore (margin of 68.5%) was higher-than-expected on account of lower operating (cost of content) expenses. The company reported amortisation charges at Rs. 210 crore owing to telecast of new movies. Consequently, PAT was at Rs. 250 crore (down 11.7% YoY), below our estimates.
Valuation & Outlook
The stressed macroeconomic setup got further aggravated by Covid-19 spread, affecting ad outlook and creation of fresh content. Ad flow can go back to normal levels only by H2FY20. There is still uncertainty over scheduling of IPL. Among positives, all major channels have witnessed viewership share growth with better impressions. We expect Sun TV to capitalise on the challenging period to build on market share gain. The company has declared a dividend of Rs. 25/share in FY20. We maintain our BUY rating with a revised target price of Rs. 490/share (12x FY22E EPS).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_SunTV_Q4FY20.pdf
Shares of SUN TV NETWORK LTD. was last trading in BSE at Rs.421.25 as compared to the previous close of Rs. 413.65. The total number of shares traded during the day was 164644 in over 4309 trades.
The stock hit an intraday high of Rs. 426.85 and intraday low of 409.65. The net turnover during the day was Rs. 69263157.