Sun TV shares tumble 8% on muted Q1 earnings show. Should you invest?
Sun TV Network on Monday fell 8% to its day’s low of Rs 837.45 on BSE after the company reported a 5% and 3% year-on-year (YoY) decline in its profit after tax (PAT) and revenue from operations respectively for the June quarter.
The PAT stood at Rs 559.77 crore for Q1FY25 while the revenue from operations was reported at Rs 1312.40 crore against Rs 1349.22 crore reported in the year-ago period.
EBITDA for the quarter ended June 2024 was reported at Rs 706.36 crore and the company has also announced an interim dividend of Rs 5 per share for its eligible shareholders.
Here is how analysts across brokerages have viewed the Q1 update:
Nuvama: Buy| Target price: Rs 1,075
Nuvama has increased the target price for the stock to Rs 1,075 from an earlier Rs 800 while retaining a buy rating.
Due to a weak performance in Q1, domestic brokerage firm Nuvama trimmed its FY25E and FY26E EPS by 4% each. With ad spending by FMCG players on the rise, Nuvama expects the revenues to pick up. Furthermore, any value unlocking in its IPL team could be a re-rating trigger.
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Motilal Oswal: Neutral| Target price: Rs 860
Motilal Oswal downgraded Sun TV from buy to neutral with a target price of Rs 860.
The prolonged weakness visible within ad revenue has hit revenue growth. Recovery within ad spends and signs of revival in the FMCG segment would remain the key monitorables for the stock. Sun TV's healthy liquidity and a cash
