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S u n T V s t o c k u n c e r t a i n …
According to media reports, CBI has completed its preliminary enquiry
into Dayanidhi Maran’s role in the 2G spectrum allocation scam and an
FIR would be filed within a couple of days. Responding to the news, Sun
TV’s shares have fallen by 14.3% in this week to | 249. Though we remain
positive about the monopolistic nature of Sun TV’s business, considering
the uncertainty, we have put the Sun TV stock under review until further
clarity is received on the case.
ƒ Highlights
According to media reports, the Central Bureau of Investigation
(CBI) may file an FIR against the Maran brothers with regard to the
2G related scam and Aircel stake sale by erstwhile promoter C
Sivasankaran. Earlier this week, Sun Pictures COO Hansraj Saxena
resigned adding to the woes of Sun TV. Responding to the news,
the stock has fallen by 14.3% over the last week.
Also, the launch of Arasu Cable by the Tamil Nadu government
coupled with the recently imposed 30% tax on DTH in Tamil Nadu
may pose a threat to the Sun group’s monopoly in the Southern
market. Arasu Cable had commenced operations in Tamil Nadu on
September 2, 2011. Though the initial response to the government
owned Arasu cable is mixed due to the absence of popular pay
channels and lack of investment in infrastructure, it may prove to be
a tough challenge for Sun TV in future.
V a l u a t i o n
Though the current monopolistic business model of Sun TV continues to
remain attractive, the stock is surrounded by uncertainty pertaining to the
2G scam and impact of Arasu cable. The stock has depreciated about
41.7% over the last 12 months and is currently trading at 11.0x one year
forward EPS against last year’s average of 23.4x. We have put the stock
under review till further clarity emerges. Clients holding the stock may
continue to hold but we advise clients to refrain from bottom fishing.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S u n T V s t o c k u n c e r t a i n …
According to media reports, CBI has completed its preliminary enquiry
into Dayanidhi Maran’s role in the 2G spectrum allocation scam and an
FIR would be filed within a couple of days. Responding to the news, Sun
TV’s shares have fallen by 14.3% in this week to | 249. Though we remain
positive about the monopolistic nature of Sun TV’s business, considering
the uncertainty, we have put the Sun TV stock under review until further
clarity is received on the case.
ƒ Highlights
According to media reports, the Central Bureau of Investigation
(CBI) may file an FIR against the Maran brothers with regard to the
2G related scam and Aircel stake sale by erstwhile promoter C
Sivasankaran. Earlier this week, Sun Pictures COO Hansraj Saxena
resigned adding to the woes of Sun TV. Responding to the news,
the stock has fallen by 14.3% over the last week.
Also, the launch of Arasu Cable by the Tamil Nadu government
coupled with the recently imposed 30% tax on DTH in Tamil Nadu
may pose a threat to the Sun group’s monopoly in the Southern
market. Arasu Cable had commenced operations in Tamil Nadu on
September 2, 2011. Though the initial response to the government
owned Arasu cable is mixed due to the absence of popular pay
channels and lack of investment in infrastructure, it may prove to be
a tough challenge for Sun TV in future.
V a l u a t i o n
Though the current monopolistic business model of Sun TV continues to
remain attractive, the stock is surrounded by uncertainty pertaining to the
2G scam and impact of Arasu cable. The stock has depreciated about
41.7% over the last 12 months and is currently trading at 11.0x one year
forward EPS against last year’s average of 23.4x. We have put the stock
under review till further clarity emerges. Clients holding the stock may
continue to hold but we advise clients to refrain from bottom fishing.
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