Comparison of Zee Entertainment and Sun TV - HDFC Securities

Zee good, Sun better !

TV broadcasters are direct beneficiaries of digitisation in India. The resultant upside to domestic subscription revenues is higher for Sun TV at 2.7x vs. 1.2x for Zee. Ad revenues for Zee face competitive headwinds, while Sun benefits from the settlement with Arasu.

Zee has higher earnings sensitivity, institutional ownership, expectations and valuations compared to Sun TV. Maintain OPF on Zee (TP Rs 186 based on 22x FY14E EPS).

We think Sun TV offers a better risk reward proposition, despite promoter concerns. BUY with TP of Rs 404, based on 20x FY14E EPS.

Source : Equity Bulls

Keywords