Sun shines with flying numbers

Sun shines with flying numbers

Author | Dipali Banka | Thursday, Jul 29,2010 8:36 AM

Sun shines with flying numbers

Sun TV continued with its robust performance, reporting revenue growth of ~53 per cent for the first quarter of fiscal year 2010-11 at Rs 4,404 million. The net profit stood at Rs 1,709 million, an increase of 42.7 per cent from Rs 1,198 million in the same quarter last year.

According to a company statement, growth in revenues had been largely a function of sustained advertising growth and subscription revenue contributed through a well-diversified mix of clients (national, regional and local) across multiple product categories.

“Key driver for Sun TV’s revenue growth was the movie business, the revenues of which grew by 118 per cent. Also, growth in domestic subscription revenue from analogue cable and DTH by 42 per cent and 84 per cent, respectively, contributed to the overall growth,” pointed out Mihir M Shah, Research Analyst, Alchemy Share & Stock Brokers.

Effective cost rationalisation measures grew Sun TV’s Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) by 60.95 per cent to Rs 3,599 million in Q1 FY11 as compared to Rs 2,236 million in the same quarter last year.

Anand Shah, Senior Research Analyst - FMCG & Media, Angel Securities, noted, “The cost of revenues (down 116bp YoY to Rs 27 crore), staff cost (down 173bp YoY to Rs 40 crore) and other expenses (down 108bp YoY to Rs 14 crore) declined. Moreover, the incremental growth in advertisement revenue, contributing ~55 per cent to the total revenue was largely on account of ad-rate hike, which directly reflected in the margins (due to no cost attached).”

The company gave a guidance of 10-15 per cent growth in ad revenues going forward.

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