The Q1 results were a positive surprise, led by 18 percent YoY growth in subscription revenue, says CLSA.
Sun TV Network share price jumped over 6 percent intraday on August 17 after research firm CLSA retained buy on the stock with a target of Rs 490 per share.
CLSA believes that Q1 results of Sun TV were a positive surprise, led by 18 percent YoY growth in subscription revenue.
Advertising revenues declined 67 percent YoY, with August advertising revenue at 75 percent of pre-COVID levels, according to a CNBC-TV18 report.
CLSA foresees a low earnings hit for the company from COVID-19 in FY21 and sees growth returning in CY22. Dividend yield could have an upside with rising Rs 3,000 crore cash.
Sun TV Network posted a 33.5 percent fall in consolidated net profit to Rs 257 crore in Q1 June 2020 from Rs 386.81 crore reported in Q1 June 2019. Consolidated net sales for Q1 June 2020 stood at Rs 611.51 crore, which fell almost 45 percent from Rs 1,110 crore in Q1 June 2019.
Profit before tax came at Rs 352.3 crore in the quarter ending June 2020, 40 percent lower from Rs 587 crore posted in the same period last year. Total tax expense declined 52 percent to Rs 95.1 crore in Q1 June 2020 over Q1 June 2019.
On a standalone basis, the company's net profit declined 26 percent to Rs 282.8 crore on a 44 percent drop in net sales to Rs 606.1 crore in Q1 June 2020 over Q1 June 2019.
The stock witnessed a spurt in volume by more than 7.21 times and was trading with volumes of 684,608 shares, compared to its five-day average of 108,752 shares, an increase of 529.51 percent.
It also touched the upper circuit of Rs 440.20 per share and was trading at Rs 424.80, up Rs 24.60, or 6.15 percent. It has touched an intraday high of Rs 440.20 and an intraday low of Rs 408.15.