LKP Securities
Sun TV (Buy)
Target: ₹532
CMP: ₹425
Sun TV’s Q2-FY21 numbers came in line with our expectations as Ad revenues almost doubled sequentially while falling 29 per cent y-o-y. The sequential growth was on the back of opening of economy, normalcy coming back and advertisers increasing their Ad spend. This was also a slower dip as compared to 66 per cent fall witnessed in Q1.
On the other hand, subscription revenues maintained momentum as they grew by 7.5 per cent y-o-y driven by cable TV business, which went up by 15.4 per cent y-o-y.
IPL recorded small amount of revenues at ₹45 crore as only 3 matches of Sun Risers Hyderabad were played in the quarter. Total revenues were hence just 2 per cent down. EBITDA margins were at 66.4 per cent, lower by 230 bps qoq as content costs moved up to 13.3 per cent from 11.1 per cent with resumption of fresh content, while they were up 580 bps y-o-y from 60.6 per cent.
Bottom-line was supported by lower amortisation expenses with absence of any theatrical releases. Within subscription revenues, DTH revenues were up by 1.3 per cent y-o-y, while pay channel revenues went up by 15.4 per cent.