The stock of Kalanithi Maran-owned Sun TV jumped a little over 14 per cent ahead of the verdict on the Tamil Nadu Assembly elections. From ₹458 last week, the stock climbed to a high of ₹523 on Thursday but closed at ₹519.30, up 3 per cent over the previous day's close.
According to analysts, some traders went long on the stock ahead of election result announcement on May 2. Exit polls will be out on Thursday and there is a general perception that opposition DMK may come back to power.
As Maran family is very close to the DMK party and is related to the DMK chief, analysts expect Sun TV may benefit through advertisements and cable business if the DMK comes to power.
Analysts caution
However, analysts cautioned that Sun TV shares had surged ahead of the result announcements during the last Assembly election (in 2016) as well. However, as the Jayalalithaa-led AIADMK surprised most pollsters and retained the power, the stock had plunged over 6 per cent that day. "Even if DMK comes to power, the Sun TV stock may not surge immediately and will move in a range with a downward bias," said a Chennai-based analyst.