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Media: Sun TV (SUTV.BO, Sell)
• Although growth strong the increasing prospects continue to remain strong, share of the lower margin business (12%-15% vs. 75-80% in the core
television business) will impact margins negatively. We expect EBIT margins to contract by 300 bp over FY10-13E
• Current premium valuations (49% premium to Zee vs 2-yr median premium of 27%) price in an exceptionally strong growth scenario, leaving
little room for risks – leading to our Sell rating on the stock
Sun TV
> Sun TV trades at a significant premium to Asian and global peers
> Given the declining margin and ROE profile, premium valuations are unjustified, in our view
Sun TV trades at a significant premium to both Indian and
global broadcasting peers
> 12-m TP is based on 22X average of FY11E and FY12E EPS
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Media: Sun TV (SUTV.BO, Sell)
• Although growth strong the increasing prospects continue to remain strong, share of the lower margin business (12%-15% vs. 75-80% in the core
television business) will impact margins negatively. We expect EBIT margins to contract by 300 bp over FY10-13E
• Current premium valuations (49% premium to Zee vs 2-yr median premium of 27%) price in an exceptionally strong growth scenario, leaving
little room for risks – leading to our Sell rating on the stock
Sun TV
> Sun TV trades at a significant premium to Asian and global peers
> Given the declining margin and ROE profile, premium valuations are unjustified, in our view
Sun TV trades at a significant premium to both Indian and
global broadcasting peers
> 12-m TP is based on 22X average of FY11E and FY12E EPS
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