ICICI Direct has given Hold recommendation for Sun TV Network with a target price of Rs. 515 in its research report issued on Aug 13, 2022
ICICI Direct’s research report on Sun TV Network
Sun TV Network (Sun TV) is a leading regional broadcaster in India, which owns and operates a bouquet of 32 TV channels prominently across the southern market (Tamil, Telugu, Kannada & Malayalam) and Bengali language along with an OTT app SunNXT. It’s key market – Tamil viewership share has dipped from ~55%+ to ~40%+ in last few years, with peers and new entrants lapping up market share.
Outlook
We maintain our HOLD rating. Pushing back of OTT content spending remains a key concern while films content spending will create volatility in earnings. We also do not have management outlook/commentary on content strategy, margins, growth outlook and capital allocation ahead, which restricts us from turning constructive, despite lucrative valuations. We value Sun at Rs 515 i.e. 10x FY24E P/E.