Sun TV slips 5% on dismal Q1 nos; Credit Suisse downgrades

Written By Unknown on Senin, 11 Agustus 2014 | 14.02

Credit Suisse has also cut earnings by 12 percent. It is concerned that there may be a big disappointment again if Sun TV is forced to cut inventory, after the hearing on TRAI's ad cap slated for September. Despite the company increasing the number of minutes back to 15-16, Sun's quarterly ad revenues were flat on yearly basis.

Moneycontrol Bureau

Shares of  Sun TV Network slipped over 5 percent intraday on Monday due to dismal performance in April-June quarter performance. Credit Suisse has downgraded the stock to neutral with a reduced target of Rs 410 per share. 

"With media reports indicating that CBI now has enough evidence to file a charge sheet against Sun TV's promoters on the Aircel-Maxis case, this will remain an additional overhang. Valuation discount to Zee hence is unlikely to decline near term," it says in a report.

The brokerage has also cut earnings by 12 percent. It is concerned that there may be a big disappointment again if Sun TV is forced to cut inventory, after the hearing on TRAI's ad cap slated for September. Despite the company increasing the number of minutes back to 15-16, Sun's quarterly ad revenues were flat on yearly basis.

The South-based television broadcaster missed street expectations with the first quarter net profit rising 0.73 percent year-on-year to Rs 165.6 crore on slow growth in revenue and operational performance. Profit in the year-ago period was Rs 164.4 crore.

Income from operations grew by 5.3 percent to Rs 633.6 crore in the quarter ended June 2014 from Rs 601.9 crore in same quarter last year.

"Subscription revenues continue to maintain uptrend with cable TV revenues growing by 15 percent and DTH subscription revenue rising by 21 percent over same quarter last year," said the company in its filing, adding advertising revenues increased marginally to Rs 280.42 crore.

At 12:07 hrs, the stock was quoting at Rs 401.00, down Rs 18.95, or 4.51 percent on the BSE.

Posted by Nasrin Sultana
 


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