Tag: SUN TV

Elara Capital sees 25-30% upside on Sun TV as well as Zee from current levels

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sun TV Network, a prominent player in the Indian media industry, has been making headlines recently with its impressive growth and potential upside. Similarly, the proposed merger between Zee Entertainment Enterprises and Sony Pictures Networks India is also being discussed as one of the significant developments in the country’s media industry.

Karan Taurani, Senior VP-Research Media Analyst at Elara Capital, shared valuable insights on Sun TV’s performance and the anticipated Zee-Sony merger.

During an interview with CNBC-TV18, Taurani said that Sun TV, excluding its Indian Premier League (IPL) ventures, is poised for a significant upswing, adding that there is still a 25-30 percent upside potential from its current levels.

“There is still a potential of at least 25 percent upside on SUN TV primarily because of rerating of the core broadcasting business,” he said.

Sun TV Network has chosen not to expand its digital network. While many media companies are exploring the digital space, Sun TV’s strategic focus remains primarily on its television offerings.

Sun TV Network, headquartered in Chennai, Tamil Nadu, is a significant part of the Sun Group and stands as one of Asia’s largest TV networks. Founded by Kalanithi Maran on April 14, 1992, the company has achieved remarkable success. Sun TV Network primarily operates in four South Indian states: Tamil Nadu, Karnataka, Andhra Pradesh, and Kerala. Among its impressive array of channels, Sun TV, the flagship channel, dominates the Tamil General Entertainment Channel (GEC) genre with a market share exceeding 40 percent. This formidable presence underscores Sun TV Network’s influence and reach across South India.

Switching gears to the broader media landscape, Taurani also commented on the Zee-Sony merger. He expressed optimism about the merger’s progress, stating that it seems likely to proceed, with or without the involvement of Punit Goenka.

Punit Goenka, the former chief of Zee Entertainment Enterprises Ltd, on Friday, moved the Securities Appellate Tribunal (SAT) seeking a stay on the Securities and Exchange Board of India’s (SEBI) order barring him from holding key positions within four Zee group firms and in the merged entity of Zee Entertainment Enterprises Ltd (ZEEL) and Sony Pictures Networks India. The SEBI order has alleged that Goenka and his father Subhash Chandra, former chairman of ZEEL, abused their roles as directors and Key Managerial Personnel (KMPs) of a listed company by siphoning off funds for their own benefit. Goenka is likely to question how can he be kept out of office until the probe is completed, which SEBI said could take eight months.

“We don’t foresee Sony waiting for eight months for the merger to happen. We believe that there is a higher likelihood for the merger to go through without Punit Goenka. The merger is well on track with or without him,” Taurani said.

Taurani estimated that the entire merger process will take approximately two months to complete. Furthermore, Taurani believes that the merged entity will be listed this fiscal year, adding another layer of intrigue to the deal.

For investors in Zee Entertainment, Taurani’s insights provide reason for optimism. He suggested that there is a likelihood of Zee Entertainment’s stock price crossing Rs 340 mark post-merger, which would be a substantial increase from its current levels.

“Once the roadblocks are cleared over the next two months, there is high likelihood of the stock reaching Rs 340-350 levels. So there is a good amount of 25-30 percent potential upside from current levels,” he said.

For more details, watch the accompanying video

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Sun TV Network trades in green as Q4 results meet analyst expectations

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sun TV Network shares advanced on Monday after its March quarter results were in line with analysts’ estimates despite a fall in margins due to high IPL-related costs.

Brokerage Nomura kept the rating on the stock unchanged at ‘Neutral’ and the target price at Rs 507 against Friday’s close of 425.90 per share, implying a potential upside of 19 percent.

Nomura in a report stated that Sun TV Network reported a 2 percent year-on-year decline in its revenue to Rs 840.4 crore in the March quarter of FY23 against Rs 857 crore a year ago which was in line with its expectations.

However, advertisement revenue remained flat against its estimate of a five percent year-on-year growth and subscription revenue growth of two percent also missed the estimate of three percent year-on-year expansion.

Sun TV Network’s earnings before interest tax depreciation and amortisation (EBITDA) declined 11.7 percent to Rs 497.8 crore in the fourth quarter of FY23 against Rs 563.9 crore a year ago.

“The EBIT margin at 50.7 percent (-16% y-y), was below our estimate of 53.8 percent. This was partly impacted by the booking of IPL (Indian Premier League) related costs,” Nomura stated.

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Sun TV reported a 7.3 percent decline in net profit to Rs 380.2 crore for the March quarter compared to Rs  410 crore a year ago.

“Higher other income (Rs 80.8 crore,  Nomura: Rs 34.7 crore) led to profit after tax of Rs 3.7 bn, down 10 percent y-o-y, largely in line with our estimate,” Nomura said.

SUN TV declared a final dividend of Rs 15 per share, maintaining the dividend payout at 35 percent.

The results for the quarter and year ended March 31, 2023 include income from the company’s cricket franchises (SunRisers Hyderabad and SunRisers Eastern Cape) for season 2023 of Rs 36.96 crores and Rs 287.27 crores respectively and corresponding costs of Rs 52.94 crore and Rs 204.98 crore.

“We continue to see structural growth risks for Sun’s ad business on the rising preference for OTT content, Sun’s delay in capitalizing on this opportunity, and existing OTT players such as Netflix (NFLX US, Not rated) competing for ad revenue in the future,” Nomura said.

Sun TV shares are trading 1.3 percent higher at Rs 431.45 on BSE at 9.57 AM.

Catch the latest market update with CNBC-TV18.com’s blog 

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Sun TV Q2 Results: Muted advertising revenue results in quarterly revenue miss

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Sun TV Network” isinid=”INE424H01027″ bseid=”532733″ nseid=”SUNTV” sector=”Media & Entertainment” exchange=”nse”]

Subdued performance from the advertising business meant Sun TV’s quarterly revenue missed expectations from analysts.

As a result, shares ended 9 percent lower on Monday.

The company’s revenue declined 3 percent for the quarter while net profit grew by a similar quantum from last year.

EBITDA margin expanded nearly 300 basis points to 65.1 percent, higher than the estimate of 61.2 percent.

Advertising revenue for the quarter remained muted at Rs 343 crore. The company has also approved an interim dividend of Rs 3.75 per share, record date for which has been set as November 21.

Brokerage firm UBS attributed the earnings miss due to an impact from high inflation. It has maintained its buy rating on the stock with a price target of Rs 600

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IPL media rights: Sun TV, United Spirits likely to gain Rs 400-500 crore this year

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Sun TV Network” isinid=”INE424H01027″ bseid=”532733″ nseid=”SUNTV” sector=”Media & Entertainment” exchange=”nse”]Companies like Sun TV, which owns the Sunrisers Hyderabad, and United Spirits, which owns Royal Challengers Bangalore, are set to gain handsomely from their share in media rights money distribution for the Indian Premier League (IPL) tournament this year.

As per estimates, Sun TV and United Spirits will earn between Rs 400 crore and Rs 500 crore per year on a net basis over the next five years. The jump in revenue is stark when compared to the previous cycle, in which the figure was roughly Rs 150-180 crore.

On the back of this news, United Spirits stock had a choppy run. It opened higher and rose as much as 1.39 percent in early trade to Rs 778.55 but then lost much of its initial momentum. At 11:47 am on Wednesday, the scrip was trading at Rs 769 per share on the BSE.

Meanwhile, Sun TV soared as much as 4.26 percent to Rs 437.95 on the BSE. At 11:49 am, the stock was trading at Rs 413.20 apiece on the BSE, down 1.63 percent.

As far as the distribution of money in IPL media rights is concerned, 50 percent of the money stays with the Board of Control for Cricket in India (BCCI), 40 percent is equally divided among all the teams, and the remaining 10 percent gets divided among the top four teams, depending on their positions in the playoffs each year.

Shedding light on Sun TV’s gain, Karan Taurani, Senior Vice-President and Research Analyst of Elara Securities, told CNBC-TV18 that 35-40 percent of Sun TV’s market capitalisation could, in fact, be attributed to the IPL team.

“If you do the math, each IPL team’s revenue is increasing by 2-2.2 times from the past. The numbers will probably look towards Rs 650-700 crore in terms of revenue and bases, and even the valuations will probably double from Rs 4,000-5,000 crore range,” he said.

“If cash is included, then Sun TV’s broadcasting business is trading at a very cheap valuation,” Taurani added.

Also Read: Disney Star, Viacom18 bag IPL media rights in mega broadcast deal

This year Star India won the TV rights for IPL with a winning bid of Rs 23,575 crore, while Viacom 18 bagged the digital rights with a bid of Rs 23,758 crore.

Digital has been the main contributor in pushing the total value for this time’s auction of media rights to Rs 48,390 crore; the jump is massive when compared to last year’s figure, which was a little over Rs 16,000 crore.

As per CLSA, for Star to make money incurred on this, advertising revenue has to grow by 15 percent for the next five years to equate to Disney Star TV’s bid cost. For Viacom 18, meanwhile, 57 percent growth in advertising revenue is needed to match the bid cost.

Analysts at the brokerage also believe that there might be a dip in the 46 million Indian users of Hotstar, who account for 36 percent of overall Disney Plus’ subscribers. The analysts believe the platform could see a 40-50 percent drop in subscriber base on account of them not having digital IPL rights.

UBS believes the results of the auction have been positive for Sun TV. The brokerage house has a ‘buy’ call on the stock with a target price of Rs 630 per share. On Zee, they have a ‘neutral’ rating, with a target price of Rs 350 per share.

Watch the accompanying video of CNBC-TV18’s Mangalam Maloo for more details.

Catch the latest stock market updates with CNBCTV18.com’s blog

Disclosure: Viacom18 is part of the Network18 Group which is also the parent company that operates CNBC-TV18.

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Confident of doing much better in FY22 than last year: Sun Group’s SL Narayanan

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sun TV posted its Q4FY21 earnings. Ad revenues have come in well above estimates, but dividend payout at just Rs 5 per share is at the lowest level since FY10. SL Narayanan, Group CFO, Sun Group, discussed the results and road ahead.

“We are quite confident now. We should be doing a lot better than last year,” he said in an interview with CNBC-TV18.

The lockdown of 2021 is not as unforgiving as the lockdown of 2020. From a 65 percent drop, we reduced to 9 percent drop by December, and in the March quarter, we posted 8 percent growth. We could have continued on this trendline, but for the unfortunate happenings of April and May – which were a bit of a dampener but it feels a lot different than what it was same time, last year,” he added.

On dividend, he stated, “I don’t think there is a better company than Sun TV in the media space when it comes to distribution of cash. If I take FY11 to FY20, the company has paid around Rs 5,700 crore in dividends. Barring a couple of years in between, where we were conserving cash for our potential M&A opportunity, we have consistently paid more than 50 percent of profit after tax (PAT

“The Board is extremely obsessed with maintaining a high return on equity – it has always been around 30 percent,” he further mentioned.

In terms of digital, he stated, “We are one of the biggest buyers of satellite rights and more importantly, we are now going into digital rights. So, we have been extremely busy holding up our plans for beefing up the catalogue and the content library. We have always been spending anywhere between Rs 400 -Rs 500 crore for buying broadcast rights for both, satellite and digital. So that number can happen once things normalize.”

When asked for his plans on OTT, he replied, “We are having a lot of movie content for OTT because in this part of the world, movies seem to be driving demand more than the typical web series, thrillers. I personally believe that this particular market is very niche. To put an extraordinary investment of our capex into a niche market at this stage, the business is not very strong there. That is the reason why our focus will be on mainline television.”

For the full interview, watch the accompanying video.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Here’s why media stocks are buzzing in trade

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Media stocks have seen big gains coming in as restrictions are easing out, and all eyes are on Sun TV as the company will be reporting its Q4 earnings on Friday.

Second half of FY21 saw a sharp rebound in economy, resulting in better advertisement revenue growth. CNBC-TV18 poll indicates 6 percent increase in overall revenues, 5 percent jump in operating profits, margins at 68 percent, and net profit to come in at Rs 381 crore.

All these media stocks are trading at historical discounts. Zee for instance is trading at 12 times, Network18 at 9 times, TV Today Network also 9 times, and Sun TV too is trading lower at just 10 times.

With the opening up of the economy, advertisement revenues are expected to bounce back sharply resulting in better earnings further aided by growth in their digital business.

Watch this video for more.

Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Earnings can surprise positively in this year, very optimistic on Sun NXT: Sun TV

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sun TV reported Q3FY21 earnings. Ad revenue growth is still not back to pre-COVID levels and the company reported lower subscription revenue growth. SL Narayanan, Group CFO of Sun Group discussed the numbers.

“This quarter beginning from January, things are looking up,” he said.

“If the economy grows at 14 percent nominal as what the budget document forecasts, we will have a surprise on the positive side this year,” he added.

Narayana further stated that he is very optimistic that Sun NXT will start growing once things stabilise on the contracting side.

In terms of subscribers, he said, “At this point in time we are not spending much on customer acquisition because we don’t want to build an OTT at a significant upfront investment. The margins on our OTT business are far superior to the regular linear TV thing.”

He believes movie releases will bring growth back in subscription revenues.

“We will see a lot of new movies hitting the screens and therefore within a short time on our satellite and our OTT platform. That is the reason I am very confident that our subscription revenues will come roaring back,” he said.

For full conversation, watch the video…

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3 Mins Read

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow