ICICI Direct has given Hold recommendation for Sun TV Network with a target price of Rs. 525 in its research report issued on Jun 12, 2021
ICICI Direct’s research report on Sun TV Network
Sun TV’s Q4FY21 numbers were a tad better than our expectations in terms of advertisement and subscription revenues while profit for the quarter was ahead of our expectations on one off time tax benefit. Revenue (standalone) was at Rs 782 crore, up 6.4% YoY. Ad revenues at Rs 314.9 crore were up 8.3% YoY but still muted considering depressed base as ad spend by retail is yet to pick up. Subscription revenues were up 7.4% YoY to Rs 428 crore. EBITDA was at Rs 546.8 crore, up 8.6% YoY while EBITDA margin at 69.9% was better than our expectations, given lower other costs. PAT came in higher than expectations at Rs 449.9 crore, aided by onetime tax credit of ~Rs 52.7 crore due to earlier year taxes paid and deferred tax asset creation.
Outlook
We maintain HOLD rating on the stock. We value Sun TV at 12x FY23E EPS (same as Zee) to arrive at a revised target price of Rs 525 (earlier Rs 570).