Japanese brokerage Nomura also retained its buy rating on the stock, but cut price target to Rs 644, factoring in 5 percent/22 percent estimated growth in advertising/subscription revenues for FY20.
Shares of Sun TV Network fell more than 4 percent intraday to hit a three-year low on August 13 as global brokerages slashed price target on the stock after weak earnings in Q1.
The stock lost 60 percent of its value from its high touched in January 2018. It was quoting at Rs 428.65, down Rs 19.80, or 4.42 percent on the BSE at 1206 hours IST.
Sun's consolidated profit declined 7 percent year-on-year to Rs 387 crore and revenue fell 1 percent to Rs 1,131 crore due to muted advertising revenue growth in the quarter ended June 2019.
Topline excluding IPL segment showed a 16 percent growth year-on-year at Rs 857 crore in Q1.
Advertising revenue in Q1 grew 1.6 percent year-on-year and subscription revenue increased 28 percent YoY against street expectations of around 11 percent for the quarter.
Earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 7 percent to Rs 694 crore and margin contracted 350bps to 61.4 percent compared to year-ago.
Global brokerage houses remained bullish on the stock, but slashed price target on lower earnings estimates after Q1 results.
Citi has maintained buy call on the stock but cut target price to Rs 580 from Rs 690 per share earlier after lowering earnings estimates by 5-6 percent.
Japanese brokerage Nomura also retained its buy rating on the stock, but cut target to Rs 644, factoring in 5 percent/22 percent estimated growth in advertising/subscription revenues for FY20.
"We lower EBITDA margin estimates by 50/200 bps for FY20/21 to factor in higher costs, and cut EPS estimates by 0.5 percent/2 percent for FY20/21," the brokerage said.
"While subscriptions outlook remained strong, the company sees muted advertising revenue growth in FY20," said CLSA that cut earnings estimates by 1-6 percent and as a result slashed price target to Rs 600 from Rs 730 per share earlier.
However, the brokerage maintained buy call as stock trades at a 40 percent discount to its 10-year average PE.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.