Motilal Oswal is bullish on Sun TV has recommended buy rating on the stock with a target price of Rs 720 in its research report dated February 08, 2019.
Motilal Oswal's research report on Sun TV
SUNTV reported strong revenue growth of 32% YoY to INR9b (14% beat), mainly due to better-than-expected movie revenue and backed by healthy ad and subscription revenue. EBITDA, thus, grew by a robust 36% YoY to INR6.8b (15% beat), with the margin expanding 175bp YoY to 73.8%. PAT grew 32% YoY to INR3.5b (7% beat) on the back of strong EBITDA growth, partly offset by higher depreciation cost. For 9MFY19, revenue/EBITDA/PAT grew 29%/36%/38% YoY.
We roll forward our valuation to FY21E, valuing SUNTV at a TP of INR720 (prior: INR750), ascribing 15x (~30% discount to three-year average due to mounting pressure on viewership share and increasing investments across both traditional and digital medium) P/E to FY21E EPS.
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