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Sun TV shines in Q1 despite clearance woes; stocks rise higher on positive results

04-August-2015
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Sun TV shines in Q1 despite clearance woes; stocks rise higher on positive results

Sun TV Network stocks soared back on top on Monday. On news of the positive Q1 results, Sun TV stocks went up by 8.9% on the BSE stock exchange and the share price closed at Rs.366.55 on Friday. The stock has seen an even larger rise on Monday as it rose by 11.22% on the BSE exchange to Rs.374.30 and NSE exchange by 11.05% to Rs.374. The stocks had seen a huge surge during the initial hours of the market opening on the positive results posted by the network despite battling several government and legal issues.

Sun TV Network saw its revenues climb high despite a troubled quarter which saw the company’s stocks seesaw due to government denying them permission on several issues. The broadcast network’s total revenues grew by 9% since the corresponding quarter in the previous year and by 25.9% in comparison to last quarter Q4FY2015. The total income from operations in Q1FY2016 grew to Rs.691.09 crore from Rs.633.58 crore in Q1FY2015 and Rs.548.58 crore in Q4FY2015. The networks revenue, excluding the revenue from the IPL franchisee team Sunrisers Hyderabad, was up 14%, at Rs. 594. 54 crore, against Rs 520.17 crore in Q1FY2015. The revenue from IPL was Rs.96.55 crore during the quarter.

The reason for this good performance is the advertising revenues increasing up by 16% to Rs 323.89 crore. Subscription revenues saw a good growth with the cable TV revenues growing 13% and DTH subscription revenue growing by 9% over the same quarter last year. The network saw FMCG ad spends contribute the largest share which was 50% of the revenues they received and ecommerce brands starting to spend on it. A third of the growth during the quarter came from regional advertisers. This rise in the advertising revenues of the channel shows advertisers’ faith in the channel and its dominance especially in the southern markets.

The network also saw its EBITDA growing by 11% including IPL revenues and by 13% excluding IPL revenues. The company’s profit after tax (PAT) also grew by a good 19.2% as it stood at Rs.197.28 crore in Q1FY2016 from Rs.165.64 crore in Q1FY2015. The total expenses too also did not see a large increase as it rose by only 1.7% since the corresponding quarter last year as it stood at Rs.412.10 crore in Q1FY2016 from Rs.405 crore in Q1FY2015.

The network further looks to expand as it looks to invest Rs.450 in the acquisition of movie rights for satellite broadcast. This is expected to strengthen its existing library of 11,000 titles. It is also looking at the possibility of monetising its existing library of content.

The positive results and even the court’s decision to allow the network to participate in the Phase III radio auctions has given a big boost to it. It can be recalled that the Sun TV Network’s market cap had seen an erosion of over Rs.7,500 crore after the Ministry of Home Affairs (MHA) had denied security clearance to 33 TV channels and the Ministry of Information & Broadcast (MIB) excluding Sun TV Network’s radio brands in the radio auctions. 

Despite these several obstacles Sun TV Network has managed to push ahead and get ahead.

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