Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Sun TV Limited
Negative sentiment persists
Newsflow on involvement in 2G scam has led to stock price decline
Sun TV’s stock price declined c28% today due to newsflow that a public interest
litigation (PIL) suit was filed against Mr. Dayanidhi Maran, who is the union
textiles minister and the brother of Sun TV’s chairman, Mr. Kalanithi Maran.
News reports suggest that Mr. Kalanithi Maran and Sun TV might have benefited
from actions taken by Mr. Dayanidhi Maran during his tenure as telecom minister
in 2004-2007.
This newsflow has been sentiment negative
We believe this event is sentiment negative for the stock and it could create further
pressure on Sun TV’s stock price. In our note, Sun TV: Stock price unlikely to rerate
in near term, published 24 February 2011, we had an anti-consensus Sell rating
as we believed the negative newsflow on the chairman’s involvement in the 2G
scam could create pressure on the stock price. The recent Tamil Nadu state
assembly election result was negative for sentiment given the chairman has family
ties with the DMK party (which got voted out in May 2011).
Sun TV remains fundamentally strong
Sun TV’s fundamentals remain strong as its entertainment channels continue to
have dominant viewership share in TN, Andhra Pradesh and Karnataka. Sun TV
recently implemented an ad rate hike of 6-43% for its various channels starting 1
April 2011. The distribution partnership with IBN18 has started gaining traction.
Valuation: Our rating and price target are under review
Our price target (now under review) is derived from a DCF-based methodology
and explicitly forecast long-term valuation drivers using UBS’s VCAM tool.
Sun TV Limited
Sun TV Network Ltd (Sun) is the largest TV broadcaster in south India and has
channels catering for the four regional languages: Tamil; Telegu; Kannada; and
Malayalam. Kalanithi Maran is the majority shareholder with a 77% stake. Sun
and its two subsidiaries have radio licences in 44 cities.
Statement of Risk
We believe the company faces regulatory risks and competitive risks in its core
business of broadcasting.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Sun TV Limited
Negative sentiment persists
Newsflow on involvement in 2G scam has led to stock price decline
Sun TV’s stock price declined c28% today due to newsflow that a public interest
litigation (PIL) suit was filed against Mr. Dayanidhi Maran, who is the union
textiles minister and the brother of Sun TV’s chairman, Mr. Kalanithi Maran.
News reports suggest that Mr. Kalanithi Maran and Sun TV might have benefited
from actions taken by Mr. Dayanidhi Maran during his tenure as telecom minister
in 2004-2007.
This newsflow has been sentiment negative
We believe this event is sentiment negative for the stock and it could create further
pressure on Sun TV’s stock price. In our note, Sun TV: Stock price unlikely to rerate
in near term, published 24 February 2011, we had an anti-consensus Sell rating
as we believed the negative newsflow on the chairman’s involvement in the 2G
scam could create pressure on the stock price. The recent Tamil Nadu state
assembly election result was negative for sentiment given the chairman has family
ties with the DMK party (which got voted out in May 2011).
Sun TV remains fundamentally strong
Sun TV’s fundamentals remain strong as its entertainment channels continue to
have dominant viewership share in TN, Andhra Pradesh and Karnataka. Sun TV
recently implemented an ad rate hike of 6-43% for its various channels starting 1
April 2011. The distribution partnership with IBN18 has started gaining traction.
Valuation: Our rating and price target are under review
Our price target (now under review) is derived from a DCF-based methodology
and explicitly forecast long-term valuation drivers using UBS’s VCAM tool.
Sun TV Limited
Sun TV Network Ltd (Sun) is the largest TV broadcaster in south India and has
channels catering for the four regional languages: Tamil; Telegu; Kannada; and
Malayalam. Kalanithi Maran is the majority shareholder with a 77% stake. Sun
and its two subsidiaries have radio licences in 44 cities.
Statement of Risk
We believe the company faces regulatory risks and competitive risks in its core
business of broadcasting.
No comments:
Post a Comment