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Sun TV Network

Napster

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#1
Buy Sun TV Network; target of Rs 515: PINC Research



PINC Research is bullish on Sun TV Network and has recommended buy rating on the stock with a target of Rs 515 in its April 21, 2011 research report.
“Sun TV Network, the leader in India's largest entertainment market - South India, outpaced South Indian TV ad industry growth rate. In the Rs 27 billion South Indian TV ad market, Sun TV's ad revenue witnessed 30% CAGR over FY07-FY10 v/s 20% industry growth (Tamil, Telugu, Kannada & Malayalam). Its competitive position of premium pricing power and a ‘must’ platform for national and local advertisers underpins our belief that Sun TV will maintain its leading position and growth momentum.”
“We believe subscription revenue should grow at a robust pace due to increased level of digitization in DTH and digital cable segments. Subscription revenue saw a healthy 27% CAGR over FY07-FY10 led by strong thrust from the DTH segment. Favorable market pull factors would further assist in expanding the DTH subscriber base and fall in subscription revenue leakages will enhance cable revenue. We expect subscription to register 27% CAGR over FY10-FY13E. Sun TV’s unique slot sale model has helped it to keep content cost at it’s minimum. It sells it’s prime time ad inventory for an upfront charge to content providers, ensuring revenue and protecting rising content cost without compromising on quality of the content. This successful model ensures robust margins and lowers business risks.”
 
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#2
It depends on the election results. Already Ms.Jayalalitha announced that cable networks will be nationalised, if she comes to power. Also if AIADMK comes to power, the government support will not be there. So, Sun network will face tough time alongwith Kalaignar TV.