Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Challenging quarter
Sun TV Network’s Q3FY12 results were below our expectation on the
back of 6.6% YoY drop in advertising revenue. Analog subscription
revenue de-grew by 45% as the state run MSO did not carry the
network’s channels in Tamil Nadu. High movie content cost impacted
EBIT margins which were at 15 quarter low. We lower our FY12/FY13
estimates but maintain BUY on the stock.
Weak performance: For the first time the company posted 6.7% drop
in advertisement revenue due to the economic slowdown as key
sectors such as FMCG and telecom cut spends. The company posted
29% drop in revenue as no movies were released during the quarter
compared to ‘Robot’ in Q3FY11 which garnered Rs1.5bn in revenue. In
the radio business the company posted a revenue of Rs620mn with an
operating profit of Rs60mn for 9MFY12.
Subscription revenues under pressure: The company posted 45%
YoY drop in analog subscription revenues as the channels were not
carried by state run MSO in the Tamil Nadu. Management maintained
that talks were on with the MSO but there was no definite time frame
for resolving the issue. DTH subscription revenue was up by 19% to
Rs840mn on the back of 7.43mn paid subscribers. International
subscription revenue was up by 19% at Rs240mn due to the
expanding footprint in USA and Canada, introduction of new
packages in Middle East and increasing number of channels.
Margins under pressure: Operating margins of the company
declined by 367bps YoY and 73bps on a sequential basis to 80.2% on
the back of lower revenue. Operating profit declined by 32% YoY as no
movies were released during the quarter while sequentially the drop
was 6.6%. EBIT margin was the lowest in the last 15 quarters following
high content cost at 53.8% down 102bps YoY and 112bps
sequentially. However PAT margins increased by 178bps YoY on the
back of higher than expected other income.
Estimates lowered; Maintain BUY: We have lowered our earnings
estimates for FY12/FY13 factoring in lower than expected advertising
revenue, lower analog subscription revenue on the back of nonagreement
with Arasu Cable and lower growth in radio business. The
stock is currently trading at 18.2x FY12E and 16.5x FY13E EPS of Rs17.8
and Rs19.6, respectively. We maintain BUY rating on the stock with a
target price of Rs373 (valuing the stock at 19x FY13E EPS).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Challenging quarter
Sun TV Network’s Q3FY12 results were below our expectation on the
back of 6.6% YoY drop in advertising revenue. Analog subscription
revenue de-grew by 45% as the state run MSO did not carry the
network’s channels in Tamil Nadu. High movie content cost impacted
EBIT margins which were at 15 quarter low. We lower our FY12/FY13
estimates but maintain BUY on the stock.
Weak performance: For the first time the company posted 6.7% drop
in advertisement revenue due to the economic slowdown as key
sectors such as FMCG and telecom cut spends. The company posted
29% drop in revenue as no movies were released during the quarter
compared to ‘Robot’ in Q3FY11 which garnered Rs1.5bn in revenue. In
the radio business the company posted a revenue of Rs620mn with an
operating profit of Rs60mn for 9MFY12.
Subscription revenues under pressure: The company posted 45%
YoY drop in analog subscription revenues as the channels were not
carried by state run MSO in the Tamil Nadu. Management maintained
that talks were on with the MSO but there was no definite time frame
for resolving the issue. DTH subscription revenue was up by 19% to
Rs840mn on the back of 7.43mn paid subscribers. International
subscription revenue was up by 19% at Rs240mn due to the
expanding footprint in USA and Canada, introduction of new
packages in Middle East and increasing number of channels.
Margins under pressure: Operating margins of the company
declined by 367bps YoY and 73bps on a sequential basis to 80.2% on
the back of lower revenue. Operating profit declined by 32% YoY as no
movies were released during the quarter while sequentially the drop
was 6.6%. EBIT margin was the lowest in the last 15 quarters following
high content cost at 53.8% down 102bps YoY and 112bps
sequentially. However PAT margins increased by 178bps YoY on the
back of higher than expected other income.
Estimates lowered; Maintain BUY: We have lowered our earnings
estimates for FY12/FY13 factoring in lower than expected advertising
revenue, lower analog subscription revenue on the back of nonagreement
with Arasu Cable and lower growth in radio business. The
stock is currently trading at 18.2x FY12E and 16.5x FY13E EPS of Rs17.8
and Rs19.6, respectively. We maintain BUY rating on the stock with a
target price of Rs373 (valuing the stock at 19x FY13E EPS).
No comments:
Post a Comment