Sun TV May Continue To Shine Bright, Says Macquarie
Macquarie initiates coverage on Sun TV with Outperform rating.
Global brokerage house Macquarie initiated its coverage on South-based Sun TV Ltd. with an ‘Outperform’ rating, citing the media firm’s dominant market share in digital cable business and its wide reach in the region.
The broking firm expects Sun TV’s advertisement revenue to grow at a compounded annual growth rate of 11 percent over the next three financial years.
Sun TV’s unit Arasu Cable recently got a digital addressable system (DAS) license, which is likely to help the company capitalise on network digitisation.
The entity is planning to hike DAS average revenue per user sharply in the range of 1.8-3.5 times.Macquarie Research Report
This may translate to a 20 percent to 24 percent rise in earnings per share over the next two financial years, said the brokerage house.
Sun TV will also benefit from the its long list of movie rights, which the company has consistently been buying to tap into the huge demand for movies in South India, it said.
The biggest risk to our recommendation would be Sun TV’s promoters being convicted by higher courts in the ongoing Aircel-Maxis case.Macquarie Research Report
The hearing in the matter will be on August 29. Shares of the media firm gained 1.2 percent to Rs 826 on the BSE.