For 4QFY2012, SUN TV (STNL) reported a decline in its top-line and bottom-line. The company’s top-line declined by 7.3% yoy to Rs427cr. OPM contracted by 216bp yoy to 76.9%. Consequently, Net Profit posted sharp decline of 23.7% yoy to 159cr.”
“STNL posted a decline in its top-line due to an 8.9% yoy fall in advertising revenues to Rs235cr and a loss of cable revenues from Tamil Nadu. The omission of Sun TV channel bouquet from Arasu Cable TV has impacted the cable revenues. However, the DTH segment grew by 4.9% yoy and contributed Rs86cr to the top line. The increase in other expenditure by 37.6% to 32cr led to OPM contraction. On the earnings front, STNL reported a sharp decline in profit due to higher base as as Endhiran had contributed ~Rs23cr in 4QFY2011.”
“The continued loss of analog revenues from Tamil Nadu and the expected delay in digitalization in Chennai remains matter of concern. Accordingly, we believe the stock price would remain range-bound. At the CMP, STNL is trading at 10.3x FY2014E consolidated EPS of Rs22.1. We maintain our Neutral view on the stock
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