Dear All,
Forwarding you the Result Flash on Sun TV Network for 4QFY2011 with a Buy recommendation.
“Strong results led by movie revenue and subscription revenue growth”
CMP: `380 Recommendation: Buy Target Price: Under Review
| Exhibit 1: Quarterly Summary | |||||
| (` cr) | 4QFY11 | 4QFY10 | % yoy | 3QFY10 | % qoq |
| Revenue | 460.5 | 391.9 | 17.5 | 598.0 | (23.0) |
| EBITDA | 363.9 | 330.9 | 10.0 | 501.8 | (27.5) |
| OPM (%) | 79.0 | 84.4 | (541bp) | 83.9 | (490bp) |
| PAT | 208.3 | 165.1 | 26.2 | 225.5 | (7.6) |
Source: Company, Angel Research
Sun TV continued to post yet another quarter of strong results on both the revenues and the earnings front. While, the top-line increase is largely on account of movies distribution (we estimate ~`15cr spill over from Endhiran’s released in 3QFY2011) and subscription revenues, the earnings increase may be attributed to high other income which increased 103.2% yoy/89.5% qoq this quarter. Key highlights include – 1) overall growth of 17.5% yoy in standalone revenue (lower qoq on account of high base as all festivals consolidated in 3QFY2011), 2) 541bp yoy contraction in operating margins on account of high staff cost (up 558bp yoy on account of low base), 3) 188bp yoy decrease in the Tax rate. We maintain Buy on the stock.
Exhibit 2: Quarterly Performance (Standalone)
| Y/E March (` cr) | 4QFY11 | 4QFY10 | % yoy | 3QFY10 | % qoq | FY2011 | FY2010 | % chg |
| Net Sales | 460.5 | 391.9 | 17.5 | 598.0 | (23.0) | 1,923.7 | 1,395.0 | 37.9 |
| Cost of Revenues | 28.3 | 22.1 | 28.1 | 22.6 | 25.5 | 102.7 | 88.9 | 15.6 |
| (% of sales) | 6.2 | 5.6 | 3.8 | 17.2 | 14.9 | |||
| Staff cost | 45.3 | 16.7 | 171.5 | 48.1 | (5.8) | 174.0 | 116.0 | 50.0 |
| (% of sales) | 9.8 | 4.3 | 8.0 | 29.1 | 19.4 | |||
| Other expenditure | 23.0 | 22.2 | 3.4 | 25.5 | (9.9) | 89.1 | 79.6 | 12.0 |
| (% of sales) | 5.0 | 5.7 | 4.3 | 14.9 | 13.3 | |||
| Total Expenditure | 96.6 | 61.0 | 58.3 | 96.2 | 0.5 | 365.8 | 284.5 | 28.6 |
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