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A flow of positive news has triggered a sharp rise in the share price of city-based Sun TV Network in the last couple of days.
Sun TV’s share price gained by over 15.70 per cent or over ₹100 in the last two trading days as it could be one of the biggest beneficiaries of Tamil Nadu Arasu Cable network’s digitisation roll-out announced on Friday.
In addition, on Monday, Star India won broadcast rights for Indian Premier cricket league for ₹16,347 crore for five years. Shares of Sun TV, which owns Sunrisers Hyderabad Indian Premier League team, rose as the company’s revenue from T20 tournament is expected to rise after the latest media rights deal.
Till 2 pm on Monday the share price of Sun TV was in the red but spiked later to close at ₹806.85, up ₹38.90 or 5.07 per cent on the BSE, after the television and digital media rights deal was announced.
The scrip recorded a volume of 7.31 lakh shares, which is over six times its two-week average. Open interest of Sun TV futures rose about 6.5 per cent in the last couple of days to 73.12 lakh shares.
Subscription revenueOn September 1, when the State government distributed free set top boxes to subscribers, the share price of Sun TV rose by 10.15 per cent with above-average volumes to close at ₹767.95. Sources said Sun TV could benefit due to increased subscription revenue from digitisation.
Ankit Kedia, Analyst , Centrum Broking, said Sun TV will be biggest beneficiary of digitisation roll-out by the Tamil Nadu Government.
According to CLSA, Sun TV’s IPL revenue could rise 30 per cent from ₹143 crore last year assuming the media rights were sold for ₹9,500 crore. That would also bring in a profit of nearly ₹53 crore against a loss of ₹22 crore last year. A price of ₹12,500 crore would increase Sun TV’s revenue by 52 per cent, the brokerage house said in a report.
For the quarter ended June 30, 2017, Sun TV reported an 8 per cent increase in net profit to ₹252 crore from ₹233 crore in the corresponding quarter last year. Revenue was up 5 per cent at ₹824 crore (₹783 crore).
Subscription revenue for the quarter was up 15 per cent at ₹270 crore (₹235 crore).
180 channels, 4 packagesNearly 70 lakh subscribers, the Arasu cable network will have access to 180 channels in digital mode. There will be four packages with monthly subscriptions varying between ₹125 and ₹275 with the option of both pay and free channels.
Arasu TV, which began operations in October 2007, offers 90-100 channels through local cable operators across the State. From 4.94 lakh subscribers in September 2011, the number has climbed to 70.52 lakh. Cable operators can charge a one-time activation fee of ₹200 from customers.
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