Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Sun TV Limited
T amil Nadu election result = -ve sentiment
Event: DMK party lost Tamil Nadu state assembly elections
Tamil Nadu state assembly election results were declared last Friday, wherein the
All India Anna Dravida Munnetra Kazhagam (AIADMK) alliance won by a wide
margin (203 of the total 234 constituencies). The Dravida Munnetra Kazhagam
(DMK) party, which had ruled the state since 2006, was voted out. Sun TV
released a statement today that its promoter further pledged 2.5m shares (0.63%
stake) on 25 April 2011.
Impact: sentiment negative; expect stock price to come under pressure
We believe this is negative for sentiment on Sun TV given the promoters’ family
ties to the DMK party leadership. This gave rise to a perception that Sun TV
benefitted from the DMK party’s rule. As highlighted in our note, Sun TV: stock
price unlikely to re-rate in near term, published on 24 February 2011, we had
forecast further pressure on Sun TV’s stock price in the event of the DMK party
not winning in the election.
Action: maintain Sell; would await better environment to enter stock
We maintain a cautious view on Sun TV as we believe any negative news related
to the promoter’s involvement in the mobile spectrum scam could outweigh strong
fundamentals in the near term. Sun TV has a dominant share of viewership and
announced ad rate hikes ranging from 6-43% for its various channels starting 1
April 2011. The distribution partnership with IBN18 has also started gaining
traction.
Valuation: maintain DCF-based price target of Rs400
We derive our price target from a DCF-based methodology and explicitly forecast
long-term valuation drivers using UBS’s VCAM tool. We assume a WACC of
13.25%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Sun TV Limited
T amil Nadu election result = -ve sentiment
Event: DMK party lost Tamil Nadu state assembly elections
Tamil Nadu state assembly election results were declared last Friday, wherein the
All India Anna Dravida Munnetra Kazhagam (AIADMK) alliance won by a wide
margin (203 of the total 234 constituencies). The Dravida Munnetra Kazhagam
(DMK) party, which had ruled the state since 2006, was voted out. Sun TV
released a statement today that its promoter further pledged 2.5m shares (0.63%
stake) on 25 April 2011.
Impact: sentiment negative; expect stock price to come under pressure
We believe this is negative for sentiment on Sun TV given the promoters’ family
ties to the DMK party leadership. This gave rise to a perception that Sun TV
benefitted from the DMK party’s rule. As highlighted in our note, Sun TV: stock
price unlikely to re-rate in near term, published on 24 February 2011, we had
forecast further pressure on Sun TV’s stock price in the event of the DMK party
not winning in the election.
Action: maintain Sell; would await better environment to enter stock
We maintain a cautious view on Sun TV as we believe any negative news related
to the promoter’s involvement in the mobile spectrum scam could outweigh strong
fundamentals in the near term. Sun TV has a dominant share of viewership and
announced ad rate hikes ranging from 6-43% for its various channels starting 1
April 2011. The distribution partnership with IBN18 has also started gaining
traction.
Valuation: maintain DCF-based price target of Rs400
We derive our price target from a DCF-based methodology and explicitly forecast
long-term valuation drivers using UBS’s VCAM tool. We assume a WACC of
13.25%.
No comments:
Post a Comment