Nifty Highlights
Result Update November 5, 2018 Rating matrix Rating : Hold Sun TV (SUNTV) | 629 Target : | 675 Target Period : 12-15 months Market share loss visible… Potential Upside : 6% Revenues came in at | 749.6 crore (up 10.9% YoY), lower than our What’s changed? estimate of | 763 crore. The miss was owing to advertisement Target Changed from | 920 to | 675 revenues, which witnessed 3.7% YoY growth vs. our estimate of 14% EPS FY19E Changed from | 35.9 to | 35.8 YoY growth). Subscription revenues came in at | 339.79 crore (21.3% EPS FY20E Changed from | 41.8 to | 37.5 YoY growth), much ahead of our estimate of 15.3% YoY growth, on Rating Changed from Buy to Hold account of continued benefits of Tamil Nadu digitisation EBITDA came in at | 554.3 crore, up 11.7% YoY, marginally below our Quarterly performance expectations of | 561.4 crore largely owing to lower topline. Margins Q2FY19 Q2FY18 YoY (%) Q1FY19 QoQ (%) at 73.9% were higher than our estimate of 73.5% Revenue 749.6 675.9 10.9 1,120.4 -33.1 The company reported profit of | 351.3 crore (vs. | 303.1 crore) on EBITDA 554.0 496.1 11.7 734.7 -24.6 account of lower depreciation and higher other income EBITDA (%) 73.9 73.4 51 bps 65.6 833 bps PAT 351.3 284.7 23.4 409.1 -14.1 The company has declared an interim dividend of | 2.5 per share, in addition to | 5 per share interim dividend declared during Q1FY19 Key financials Aims to wrest back market share loss; may result in higher content cost | Crore FY17 FY18 FY19E FY20E Sun TV’s Q2FY19 muted ad growth was reflective of its market share loss Net Sales 2,646 2,963 3,547 3,956 in the key Tamil market as it conceded that its ER was impacted owing to EBITDA 1,770 2,004 2,417 2,628 Net Profit 1,030 1,135 1,412 1,479 competitive pressure, resulting in impact on advertisements.
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