RESULT UPDATE

SUN TV NETWORK Shine is back

India Equity Research| Media

EDELWEISS 4D RATINGS Sun TV Network’s (Sun TV) overall revenue and PAT performance in Absolute Rating BUY Q3FY13 was above our expectations. Key positives were (i) robust ~20% YoY growth in ad revenues due to full impact of festive season, low base Rating Relative to Sector Performer (6.5% YoY decline in Q3FY12) and renewed competition between FMCG Risk Rating Relative to Sector Medium Sector Relative to Market Overweight companies; (ii) strong growth of 27.6% YoY in analog cable revenue for the first time in FY13 and (iii) healthy growth of 13% YoY in DTH revenues. Key negative was the compression in EBITDA margin by 270bps MARKET DATA (R: SUNTV.BO, B: SUNTV IN) YoY partly due to increase in programming costs by 34.7% YoY CMP : INR 439 (investment in content due to heightened competitive intensity). Owing Target Price : INR 524 to TRAI’s recent recommendation that state governments should not be 52-week range (INR) : 447 / 177 allowed in distribution of TV channels, strong performance on the ad Share in issue (mn) : 394.1 front, benefit from digitization (5 cities in phase 2) and visible increase in M cap (INR bn/USD mn) : 173 / 3,224 analog subscription revenue, we revert to our earlier ‘BUY’ rating. Avg. Daily Vol.BSE/NSE(‘000) : 1,142.2

SHARE HOLDING PATTER N (%) Strong traction on ad revenue front a huge positive Current Q2FY13 Q1FY13 Due to strong traction in ad revenues (highest YoY ad growth in 7 quarters), Sun TV’s Promoters * 77.0 77.0 77.0 total revenues grew by 14.3% YoY to INR4,859mn. All sectors accept Real Estate and MF's, FI's & BK’s 2.1 2.1 2.9 Telecom have contributed to ad revenue growth. Broadcast revenues have dropped FII's 14.1 14.1 13.1 17% YoY as some weekend programs have been completed. Total subscription revenue Others 6.7 6.7 6.9 grew by strong 16.4% YoY, highest in last 6 quarters. Revenues from international * Promoters pledged shares : 7.4 operations (~0.6mn subscribers) grew by 8% YoY. (% of share in issue)

Sun TV will be a key beneficiary of digitisation PRIC E PERFORMANCE (%) EW Media Sun TV expects digitisation in Chennai to be completed by FY13 end. The full impact of Stock Nifty Index DTH additions in Chennai on Sun TV’s subscription revenues will be seen in Q4FY13. 1 month 7.2 3.5 10.6 Sun TV has strong presence in 5 key Phase 2 cities (~4mn subscribers). Sun TV’s DTH 3 months 23.2 6.4 22.8 ARPU stands at INR39 while DAS ARPU is expected to be at INR25. 12 months 57.7 20.0 31.3

Outlook and valuations: Positive; Revert to ‘BUY’ We continue to like Sun TV’s near monopolistic market standing and presence in the high growth regional markets. Sun TV is expected to be a huge beneficiary of the digitisation process. At CMP, the stock is trading at P/E of 23.3x and 19.3x FY13E and FY14E earnings, respectively. We rate the stock ‘ BUY/Sector Performer ’.

Financials (INR mn) Year to March Q3FY13 Q3FY12 % Change Q2FY13 % Change FY12 FY13E FY14E Abneesh Roy +91 22 6620 3141 Revenues 4,859 4,251 14.3 4,333 12.1 18,472 19,507 24,205 [email protected] EBITDA 3,763 3,411 10.3 3,290 14.4 14,144 15,009 17,883 Alankar Garude Net profit 1,899 1,679 13.1 1,517 25.2 6,929 7,443 8,980 +91 22 6623 3301 Dil. EPS (INR) 4.8 4.3 13.1 3.8 25.2 17.6 18.9 22.8 [email protected]

Dil. P/E (x) 25.0 23.3 19.3 ROAE (%) 28.5 27.6 29.3 January 24, 2013 Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL , Thomson First Call, Reuters and Factset. Edelweiss Securities Limited

Media

Sun TV Network Q3FY13 concall | Key Takeaways Ad price hike: The management is of the view that the economic situation is improving and better business confidence has improved chances of a price hike.

Ad growth: All sectors accept Real Estate and Telecom have contributed to ad revenue growth. ~55% of Sun TV’s ad revenues come from FMCG companies. Outlook for interest rate sensitive sectors is also expected to improve in the near future.

Inventory utilization: Sun TV still has sufficient headroom to utilise unsold inventory.

Phase 2: Sun TV has strong presence in 5 key cities— Hyderabad, Bangalore, Vishakhapatnam, Mysore and Coimbatore— out of the 38 Phase 2 cities. Phase 2 will have a great impact on subscription revenues as compared to Phase 1. A total of 4mn subscribers are expected out of these 5 cities.

Chennai: Full impact of DTH additions in Chennai will be seen in Q4FY13. Full digitisation in Chennai should be completed by FY13 end. Due to litigation many viewers have shifted to the DTH platform and in cable, there is no clarity yet as the litigation continues.

ARPU: DTH ARPU stands at INR39 while DAS ARPU is expected to be at INR25.

DTH subscriber base: 8.27mn which has grown from 7.87mn QoQ.

Broadcast revenues: Broadcast revenues have dropped 17% YoY as some weekend programs have been completed. In the last two years, there has been considerable increase in weekend shows which increased broadcast revenues.

International revenues: Sun TV caters to 0.6mn international subscribers. Penetration in the US market is improving and this would continue through FY13.

Radio: The revenue from radio operations (both KAL and SAFM) for 9MFY13 rose to INR780mn as compared to INR625mn in 9MFY12. In 9MFY13, EBIT stood at INR230mn and PAT at INR50mn.

Content deals: Per-sub basis agreements are being negotiated now and those will be completed in the next 1-2 months.

Movie and Non-movie content cost: Movie-related content cost has increased by 10-15% YoY in the last 3 years while non-movie content cost hasn’t increased significantly.

Movie acquisition: Movie acquisition cost will continue to grow as demand for movies is increasing. However, the increase in movie acquisition cost will be compensated by high ad prices. In FY13, the amount spent on movie acquisition will be ~INR3,500-3,750mn. In FY14, it will be ~INR3,000-3,250mn.

Serial production: 4 minutes of advertising per 30 min is sold to serial producers.

Margins: On a steady state basis, margins should be in the 78-79% range.

IPL: Sun TV has already paid deposit of ~30% of INR850mn (~INR260mn) to BCCI.

2 Edelweiss Securities Limited Sun TV Network

News channel ratings: As per recent TAM ratings, the news channel in Tamil Nadu (which had slipped in rankings) has come back to the top position.

Depreciation: INR820mn of amortization, INR225mn depreciation in Q3FY13 while depreciation and amortization were INR250mn and INR870mn respectively in Q3FY12.

Net cash: INR3,500mn.

Capex: INR750mn in FY13 while in FY14 it is expected to be around INR500 -700mn.

Payout: 60% payout is expected to continue.

Chart 1: (Ad + Broadcast) revenue reports robust ~14.7% YoY growth 3,750 60.0

3,000 45.0

2,250 30.0 (%) 1,500 15.0 (INR mn) mn) (INR

750 0.0

0 (15.0) Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q1 FY10 Q1 FY10 Q2 FY10 Q3 FY10 Q4 Ad + Broadcast revenue YoY growth

Source: Company, Edelweiss research

Chart 2: Quarterly DTH revenue traction continues 1000 200.0

800 160.0

600 120.0 (%)

(INRmn) 400 80.0

200 40.0

0 0.0 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q1 FY10 Q1 FY10 Q2 FY10 Q3 FY10 Q4 DTH revenue YoY growth

Source: Company, Edelweiss research

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Chart 3: Cost of revenues as % of revenues increased by 105bps YoY 12.5

10.0

7.5 (%) 5.0

2.5

0.0 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Cost of revenues Staff cost Other expenditure

Source: Company, Edelweiss research

Table 1: Breakup of revenues % growth Q1FY12 Q2FY12 Q3FY12 Q4FY12 FY12 Q1FY13 Q2FY13 Q3FY13 YoY QoQ Ad 2,310 2,350 2,440 2,350 9,450 2,428 2,440 2,930 20.1 20.1 Broadcast 390 390 410 450 1,640 370 370 340 (17.1) (8.1) Ad+Broadcast 2,700 2,740 2,850 2,800 11,090 2,798 2,810 3,270 14.7 16.4 DTH 840 790 840 860 3,330 890 900 945 12.5 5.0 Analog Cable 560 470 290 310 1,630 300 340 370 27.6 8.8 Total Subscription 1,400 1,260 1,130 1,170 4,960 1,190 1,240 1,315 16.4 6.0 International 200 180 240 220 840 260 260 260 8.3 0.0 Movies/Others 240 330 30 80 680 20 25 10 (66.7) (60.0) Total 4,540 4,510 4,250 4,270 17,570 4,268 4,335 4,855 14.2 12.0 Source: Company, Edelweiss research

TRAI says governments should not be allowed in TV distribution Recently, TRAI has re-iterated its earlier recommendations made in 2008 that central and state governments should not be allowed to enter the broadcasting or TV distribution business. This comes as a major blow to Arasu Cable, which has not been granted a DAS license by MIB. After ~10 months of Arasu Cable’s relaunch in September 2011, Sun TV had inked a deal with Arasu. Sun TV has just been getting INR75mn per quarter (far lower than in its earlier run rate) as subscription revenues in Tamil Nadu (excluding Chennai). Hence, we expect Arasu not getting DAS license will be a key positive for Sun TV.

Sun TV buys Hyderabad IPL team Sun TV will be paying INR850mn annually for a period of 5 years to BCCI starting with IPL 6. There is no fixed fee obligation to BCCI after the first five years. The payouts to BCCI and the players/team management will largely be funded out of the pool distributed by BCCI, receipts from ticket sales, stadium advertising and sponsorship deals. The management is confident of making profits in its IPL operations from Year 3 (IPL 8) onwards. Sun TV is planning to leverage its strong presence in Andhra Pradesh through Gemini TV and Red FM. The company has retained 20 players from the existing Hyderabad squad. The franchise has been renamed ‘Sunrisers’.

4 Edelweiss Securities Limited Sun TV Network

Digitisation Phase 2: Government sets ball rolling The government has set the ball rolling for Phase 2 of digitisation and has maintained the deadline of March 31, 2013. Phase 2, which entails digitisation of 38 cities, will be a much bigger opportunity compared to Phase 1, which had included four cities (~7mn analog subscribers). The government has asked MSOs to make a thorough assessment of the number of boxes required, details of which need to be shared in a few days. Mr. Manish Tewari, Information & Broadcasting (I&B) minister, has also explicitly stated that digitisation is high on the agenda. The Ministry of Information & Broadcasting (MIB) has also commenced work on an effective communication campaign to enhance digitisation awareness in Phase 2 cities. Acknowledging the need for meticulous planning, Chief Secretaries of all Phase 2 states have been intimated to nominate a special Nodal Officer for each city and ensure smooth transition to the digital platform.

Protests by LCOs may delay proceedings ~200 LCOs in Delhi observed a 24-hour blackout on January 20, 2013 to protest against the revenue-sharing formula of DAS. ~1mn households in North-east and East Delhi blacked out as a result of the protest. As per the LCOs, they had already submitted memorandums to the Delhi government and MIB, which failed to get satisfactory replies. As per Cable Operators Federation of India (COFI) President, Ms. Roop Sharma, the blackout will be in phases and will be held in other parts of Delhi as well and may later be taken to other metros. We believe that if these protests spread to other parts of the country, they might potentially delay the digitisation process.

Outlook and valuations: Positive; revert to ‘BUY’ We continue to like Sun TV’s near monopolistic market standing and presence in the high growth regional markets. Sun TV is expected to be a huge beneficiary of the digitisation process. At CMP, the stock is trading at P/E of 23.3x and 19.3x FY13E and FY14E earnings, respectively. Previously, Sun TV has traded at a premium to most peer broadcasting companies. There are strong signs of the company returning to the high growth path due to TRAI’s recent recommendation that state governments should not be allowed in distribution of TV channels, strong performance on the ad front, the strong presence of Sun TV in Phase 2 and visible increase in analog subscription revenue due to Arasu deal. Assigning Sun TV a FY14E P/E target multiple of 23x (~30% discount to its earlier peak trading multiple), we derive a target price of INR524. We rate the stock ‘ BUY/Sector Performer ’.

5 Edelweiss Securities Limited Media

Financial snapshot (INR mn) Year to March Q3FY13 Q3FY12 % change Q2FY13 % change YTD13 FY13E FY14E Net revenues 4,859 4,251 14.3 4,333 12.1 13,450 19,507 24,205 Cost of revenue 338 251 34.7 338 0.1 1,077 1,444 1,597 Staff costs 476 403 18.2 429 11.0 1,327 1,931 2,082 Other operating expenses 281 186 51.0 277 1.7 763 1,124 2,643 Total expenditure 1,095 840 30.4 1,043 5.0 3,166 4,498 6,322 EBITDA 3,763 3,411 10.3 3,290 14.4 10,283 15,009 17,883 Depreciation & amortization 1,044 1,125 (7.2) 1,138 (8.3) 3,115 4,548 5,288 Other income 106 232 (54.5) 96 9.8 334 426 558 Interest 17 36 (53.9) 5 234.0 24 30 30 Profit before tax 2,808 2,483 13.1 2,243 25.2 7,479 10,857 13,122 Provision for taxes 910 804 13.1 726 25.2 2,420 3,518 4,252 Core profit 1,899 1,679 13.1 1,517 25.2 5,058 7,339 8,870 Net profit 1,899 1,679 13.1 1,517 25.2 5,058 7,443 8,980 No. of shares (mn) 394 394 394 394 394 394 Diluted EPS (INR) 4.8 4.3 13.1 3.8 25.2 12.8 18.9 22.8 Tax Rate 32.4 32.4 32.4 32.4 32.4 32.4

As % of net revenues Cost of revenue 7.0 5.9 7.8 8.0 7.4 6.6 Employee cost 9.8 9.5 9.9 9.9 9.9 8.6 Other expenditure 5.8 4.4 6.4 5.7 5.8 10.9 EBITDA 77.5 80.2 75.9 76.5 76.9 73.9 Reported net profit 39.1 39.5 35.0 37.6 37.6 36.6 Note: Quarterly numbers are on a standalone basis, annual numbers include IPL impact

6 Edelweiss Securities Limited Sun TV Network

Company Description Sun TV was incorporated as Sumangali Publications in 1985. It was later renamed Sun TV in 2000 and the company filed its IPO in 2005 and raised INR6bn. It primarily operates regional television channels and has a strong presence in Tamil Nadu, Karnataka, Andhra Pradesh, and Kerala. The flagship channel Sun TV corners more than 60% market share in the Tamil GEC genre. The company earlier operated only Tamil and Malayam channels; it added Kannada and Telugu to its bouquet with the acquisition of Gemini TV and Udaya TV . It was the first channel to introduce mega soaps in South India and also the first to use digital broadcasting. Apart from the television broadcasting business, the company has a strong presence in radio broadcasting and ventured in to film production in FY09. It presently airs 43 FM radio stations across the country. The film production business is structured as a division of the company.

Investment Theme Sun TV is the leading player in South India with a bouquet of 33 channels across four states—Tamil Nadu, Karnataka, Andhra Pradesh, and Kerala. Its flagship channels—Sun TV,Gemini TV , and Udaya TV —lead their respective markets with a good premium over the second player. Strong foothold in competitive southern market poses tough entry barrier. The company benefits from a conducive distribution environment, since Sun Direct (a promoter group company), has considerable presence in South India’s distribution (DTH) market. In the overseas market, the company’s channels are carried in countries such as Malaysia, Singapore, Canada, Sri Lanka, UK, and US. The company’s direct costs are exceptionally low as it has successfully managed to run a sponsored programming model. Sun TV ventured into the movie production business in FY09. The company can leverage on its strong market share in broadcasting to monetize movies.

Key Risks Regulatory overhang Ad environment continuing to remain soft Decline in popularity of channels can lead to lower ad and pay revenues Intensifying competition could adversely impact cost of business

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Financial Statements

Key Assumptions Income statement (INR mn) Year to March FY12 FY13E FY14E FY15E Year to March FY12 FY13E FY14E FY15E Macro Net revenue 18,472 19,507 24,205 28,656 GDP(Y -o-Y %) 6.5 5.5 6.5 7.0 Direct costs 1,329 1,444 1,597 1,805 Inflation (Avg) 8.8 7.8 6.0 6.0 Other operating expenses 1,140 1,124 2,643 2,903 Repo rate (exit rate) 8.5 7.5 6.8 6.0 Employee costs 1,859 1,931 2,082 2,350 USD/INR (Avg) 47.9 54.5 54.0 52.0 EBITDA 14,144 15,009 17,883 21,598 Sector Depreciation & Amortization 4,736 4,548 5,288 6,337 TV industry ad growth (%) 9.0 10 .0 14 .0 15 .0 EBIT 9,408 10,461 12,594 15,262 TV industry sub. growth (%) 10.3 12.9 20.0 22 .0 Other income 796 426 558 619 Company Interest expenses 58 30 30 25 Sales assumptions Profit before tax 10,145 10,857 13,122 15,856 Ad revenue growth (%) (2.3) 10.0 15.0 18.0 Provision for tax 3,317 3,518 4,252 5,137 Broadcast fees growth (%) 6.6 0.0 12.0 15.0 Net profit 6,828 7,339 8,870 10,718 Subscription revenue growth (%) (2.2) 7.2 15.9 19.5 Profit After Tax 6,828 7,339 8,870 10,718 Program income (% of rev.) 4.5 4.7 4.4 4.4 Minority interest (22) (25) (31) (40) Movie distr n income (% of rev.) 3.2 0.6 2.9 3.1 Profit after minority interest 6,929 7,443 8,980 10,837 Net IPL income (INR mn) - - (250) (150) Shares outstanding (mn) 394 394 394 394 Cost assumptions Diluted EPS (INR) 17.6 18.9 22.8 27.5 Program prodn costs (% of rev.) 2.5 2.7 2.5 2.3 Dividend per share (INR) 9.5 10.0 10.0 10.0 Telecast costs (% of rev.) 1.1 1.2 1.1 1.0 Dividend payout (%) 54.0 52.9 43.9 36.4 Cost of program rights (% of rev.) 1.0 1.1 1.0 1.0

Pay channel service (% of rev.) 1.3 1.3 1.1 1.0 Common size metrics Personnel cost (% of rev.) 10.1 9.9 8.6 8.2 Year to March FY12 FY13E FY14E FY15E Financial assumptions Employee expenses 10.1 9.9 8.6 8.2 Tax rate (%) 32.7 32.4 32.4 32.4 Direct Cost 7.2 7.4 6.6 6.3 Capex (INR mn) 676 815 810 800 EBITDA margins 76.6 76.9 73.9 75.4 Debtor days 93 93 93 93 Net profit margins 37.0 37.6 36.6 37.4 Inventory days 1 1 1 1

Payable days 141 141 141 141 Growth ratios (%) Cash conversion cycle (days) (47) (47) (47) (47) Year to March FY12 FY13E FY14E FY15E Depreciation as % of gross block 8.5 8.0 7.9 7.9 Revenues (8.3) 5.6 24.1 18.4 EBITDA (10.4) 6.1 19.1 20.8 Net profit (10.2) 7.5 20.9 20.8 EPS (10.0) 7.4 20.7 20.7

8 Edelweiss Securities Limited Sun TV Network

Balance sheet (INR mn) Cash flow metrics As on 31st March FY12 FY13E FY14E FY15E Year to March FY12 FY13E FY14E FY15E Equity capital 1,970 1,970 1,970 1,970 Operating cash flow 8,764 12,146 11,325 17,554 Reserves & surplus 23,149 25,981 30,351 36,577 Investing cash flow (3,462) (4,858) (5,807) (6,975) Shareholders funds 25,120 27,952 32,321 38,547 Financing cash flow (5,778) (4,641) (4,641) (4,636) Minority interest (BS) 293 268 237 197 Net cash flow (476) 2,647 877 5,944 Preference capital 934 934 934 934 Capex (676) (815) (810) (800) Deferred tax liability 338 338 338 338 Dividends paid (4,351) (4,611) (4,611) (4,611) Sources of funds 26,685 29,492 33,830 40,016

Tangible assets 8,112 7,792 7,424 6,992 Profitability & efficiency ratios Intangible assets 4,346 5,387 6,822 8,511 Year to March FY12 FY13E FY14E FY15E CWIP (incl. intangible) 35 50 60 60 ROAE (%) 28.5 27.6 29.3 30.1 Total net fixed assets 12,494 13,229 14,306 15,563 ROACE (%) 41.0 40.5 42.8 44.0 Non current investments 1,926 1,926 1,926 1,926 Inventory day 1 1 1 1 Current Investments 318 318 318 318 Debtors days 93 93 93 93 Cash and equivalents 3,075 5,722 6,599 12,542 Payable days 141 141 141 141 Inventories 5 6 6 8 Current ratio 7.0 7.1 7.6 7.8 Sundry debtors 5,090 4,817 7,476 7,078 Interest coverage 161.6 348.7 419.8 610.5 Loans and advances 5,760 5,760 5,760 5,760

Other current assets 397 397 397 397 Operating ratios Total current assets (ex cash) 13,496 13,224 15,883 15,486 Year to March FY12 FY13E FY14E FY15E Trade payable 446 667 565 827 Total asset turnover 0.7 0.7 0.8 0.8 Others current liabilities 1,934 2,016 2,392 2,749 Fixed asset turnover 2.2 2.5 3.2 4.0 Total current liabilities & 2,380 2,683 2,957 3,576 Equity turnover 0.8 0.7 0.8 0.8 Net current assets (ex cash) 11,116 10,541 12,925 11,911

Uses of funds 26,685 29,492 33,830 40,016 Valuation parameters Book value per share (INR) 63.7 70.9 82.0 97.8 Year to March FY12 FY13E FY14E FY15E Diluted EPS (INR) 17.6 18.9 22.8 27.5

Free cash flow (INR mn) Y-o-Y growth (%) (10.0) 7.4 20.7 20.7 Year to March FY12 FY13E FY14E FY15E CEPS (INR) 29.2 30.2 36.0 43.4 Net profit 6,929 7,443 8,980 10,837 Diluted PE (x) 25.0 23.3 19.3 16.0 Depreciation 4,736 4,548 5,288 6,337 Price/BV (x) 6.9 6.2 5.4 4.5 Deferred tax (72) - - - EV/Sales (x) 9.1 8.5 6.8 5.5 Others (1,069) (421) (559) (634) EV/EBITDA (x) 12.0 11.1 9.3 7.4 Gross cash flow 10,524 11,570 13,710 16,539 Dividend yield (%) 2.2 2.3 2.3 2.3 Less: Changes in WC 1,760 (575) 2,385 (1,015) FCFPS (INR) 20.5 28.8 26.7 42.5

Operating cash flow 8,764 12,146 11,325 17,554 Less: Capex 676 815 810 800 Free cash flow 8,088 11,331 10,515 16,754

Peer comparison valuation Market cap Diluted PE (X) EV/EBITDA (X) ROAE (%) Name (USD mn) FY13E FY14E FY13E FY14E FY13E FY14E Sun TV Network 3,224 23.3 19.3 11.1 9.3 27.6 29.3 Dish TV India 1,479 - - 14.5 11.2 - - Hathway Cable & Datacom 728 - - 20.7 16.9 (4.9) (2.7) Jagran Prakashan 640 12.1 13.9 10.1 8.5 32.1 27.2 PVR 140 16.5 13.7 7.5 6.6 15.4 17.1 Zee Entertainment Enterprise 4,191 32.0 27.2 22.6 18.6 19.1 19.6 Median - 14.3 13.8 12.8 10.3 17.2 18.3 AVERAGE - 14.0 12.4 14.4 11.8 14.9 15.1 Source: Edelweiss research

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Additional Data

Directors Data Kalanithi Maran Executive Chairman K. Vijaykumar Managing Director & CEO S. Selvam Director Kavery Kalanithi Executive Director J. Ravindran Independent Director M.K. Harinarayanan Independent Director Nicholas Martin Paul Independent Director R. Ravivenkatesh Independent Director

Auditors - M/s S.R. Batliboi & Associates *as per last annual report

Holding - Top10 Perc. Holding Perc. Holding Oppenheimer Funds Incorporated 3.50 Matthews International Capital 1.51 Amansa Investments Ltd 1.02 Sbi Funds Management 0.53 Eastspring Investments Singapore 0.39 Tata Asset Management Ltd 0.35 Reliance Capital Trustee Co Ltd 0.20 Birla Sun Life Asset Management 0.19 Principal Pnb Asset Management 0.12 Bank Of New York Mellon Corp 0.11 *as per last available data

Bulk Deals Data Acquired / Seller B/S Qty Traded Price

No Data Available

*in last one year

Insider Trades Reporting Data Acquired / Seller B/S Qty Traded

*in last one year

10 Edelweiss Securities Limited RATING & INTERPRETATION

Company Absolute Relative Relative Company Absolute Relative Relative reco reco risk reco reco Risk Dish TV India BUY SP M Hathway Cable & Datacom BUY SO M Jagran Prakashan BUY SP M PVR BUY SP M Sun TV Network BUY SP M Zee Entertainment Enterprise BUY SO M

ABSOLUTE RATING

Ratings Expected absolute returns over 12 months

Buy More than 15%

Hold Between 15% and - 5%

Reduce Less than -5%

RELATIVE RETURNS RATING

Ratings Criteria Sector Outperformer (SO) Stock return > 1.25 x Sector return

Sector Performer (SP) Stock return > 0.75 x Sector return

Stock return < 1.25 x Sector return

Sector Underperformer (SU) Stock return < 0.75 x Sector return

Sector return is market cap weighted average return for the coverage universe within the sector

RELATIVE RISK RATING

Ratings Criteria

Low (L) Bottom 1/3rd percentile in the sector

Medium (M) Middle 1/3rd percentile in the sector

High (H) Top 1/3rd percentile in the sector

Risk ratings are based on Edelweiss risk model

SECTOR RATING

Ratings Criteria Overweight (OW) Sector return > 1.25 x Nifty return

Equalweight (EW) Sector return > 0.75 x Nifty return

Sector return < 1.25 x Nifty return

Underweight (UW) Sector return < 0.75 x Nifty return

11 Edelweiss Securities Limited Media

Edelweiss Securities Limited, Edelweiss House, off C.S.T. Road, Kalina, Mumbai – 400 098. Board: (91-22) 4009 4400 , Email : [email protected] Vikas Khemani Head Institutional Equities vikas.khemani@edel weissfin .com +91 22 2286 4206

Nischal Maheshwari Co-Head Institutional Equities & Head Research [email protected] +91 22 4063 5476

Nirav Sheth Head Sales [email protected] +91 22 4040 7499

Coverage group(s) of stocks by primary analyst(s): Media Dish TV India, Hathway Cable & Datacom, Jagran Prakashan, PVR, Sun TV Network, Zee Entertainment Enterprise

Recent Research

Date Company Title Price (INR) Recos

24 -Jan -13 Zee Picture perfect; 235 Buy Entertain. Result Update Enterprises 23 -Jan -13 Dish TV Margin dips, but long -term 74 Buy India story intact; Result Update 29 -Nov -12 PVR Cinemax acquisition to 252 Buy enhance clout; EdelFlash

Distribution of Ratings / Market Cap

Edelweiss Research Coverage Universe Rating Interpretation

Buy Hold Reduce Total Rating Expected to

Rating Distribution* 118 46 17 181 Buy appreciate more than 15% over a 12-month period * - stocks under review Hold appreciate up to 15% over a 12-month period > 50bn Between 10bn and 50 bn < 10bn

Reduce depreciate more than 5% over a 12 -month period Market Cap (INR) 117 57 7

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