Buy Sun TV Network; target of Rs 750: Motilal Oswal

Motilal Oswal is bullish on Sun TV Network recommended buy rating on the stock with a target price of Rs 750 in its research report dated February 14, 2024.

Broker Research

February 19, 2024 / 11:58 IST

Buy

Motilal Oswal's research report on Sun TV Network

SUNTV’s EBITDA remained flat YoY at INR5.7b (in line) with margins contracting 200bps YoY, dragged by higher operating expenses and soft revenue growth. Revenue grew 3.3% YoY to INR8.9b (in line), exhibiting some moderation. This is primarily attributed to weakened ad revenues, stemming from the impact of cricket World Cup. Prolonged weakness within the ad revenues despite festive push, coupled with risk around market share loss and strong competition from deeppocketed OTT players, continues to pose concerns. However, steady growth within subscription revenues along with improving signs of FMCG spends could aid recovery in the coming period. This, coupled with upbeat valuation for the new IPL team and steady state dividend payout (>50%) makes the stock’s valuation compelling at 8.4x EV/EBITDA on FY25 basis. We reiterate our BUY rating on the stock with a TP of INR750.

Outlook

We value the stock at 15x FY25E P/E on FY26 basis to arrive at our TP of INR750. We reiterate our BUY rating on the stock.

For all recommendations report, click here