Motilal Oswal is bullish on Sun TV Network recommended buy rating on the stock with a target price of Rs 500 in its research report dated August 15, 2020.
Motilal Oswal 's research report on Sun TV Network
Sun TV Network (SUNTV)’s revenue fell by 45% YoY, weighed by a plunge in ad revenues and the absence of an IPL season, but partly cushioned by subscription revenue growth. EBITDA fell 39%, partly offset by no fresh content production cost and SG&A cost rationalization. We revise our FY21/FY22E EBITDA by 9%/8% as we factor IPL earnings in FY21E, better subscription revenues, and the benefit of sharp cost rationalization.
Outlook
We value Sun TV at FY22E P/E of 12x on account of: a) a muted ad spend outlook in the economy and b) the looming threat to subscription revenues from NTO 2.0. Thus, we arrive at target price of INR500. Maintain Buy.
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