Visit http://indiaer.blogspot.com/ for complete details �� ��
Sun TV Network Ltd
Growth on track
Strong uptick in subscription; retain Buy
Post 2Q results, we raise FY11E and FY12 earnings estimate by 4-6% to factor
strong growth in broadcast fees and subscription revenues during the quarter.
While ad revenues were lower than expected, likely strong ad growth in 3Q given
commencement of festive season from 3Q this year vs. 2Q last year should make
up for the short fall. See further upside to earnings given recent success of its
movies – Endhiran, released in 3Q. Raise PO by 6% to Rs540 and retain Buy
rating on the stock.
Ad revs lower than expected; margins expand
Ad revenues for the quarter grew 19% yoy missing BofAMLe by 6%. Management
commented that ad spends remain robust and inventory utilization levels likely to
improve for festive season. EBITDA margin stood at 78% vs. our estimate of 75%
and was driven by strong growth in Broadcast & subscription revenues.
Subscription revs better than expected
Key highlight was strong 23% yoy growth in broadcast fee where SNL sells
program slots to content producers and 50% yoy growth in analogue subscription
revenues. DTH too grew by 75% yoy. SNL had roped in senior level professionals
from other networks to strengthen its distribution in both south and other regions,
which is paying off. Management now expects analogue revenues to grow ~30%
yoy (vs. 22%) in FY11 and ~25% yoy in FY12.
21% EPS CAGR; Maintain Buy
We forecast strong 21% earnings CAGR over FY11-13e and retain our Buy given
our view that regional markets likely to grow faster than pan India and SNL is
likely to benefit given its strong leadership position in the southern region. We
also see upside from its recent movie – Endhiran, released in 3Q.
No comments:
Post a Comment