Sun TV posted weaker-than-expected operating results, with advertisement and subscription growth impacted by the implementation of the New Tariff Order (NTO).
Sun TV Network shares fell more than 6 per cent intraday on May 24 after company reported weak operating results for January-March quarter due to TRAI's new regime.
Brokerage houses slashed price target.
The stock was quoting at Rs 524, down Rs 24, or 4.38 per cent on the BSE, at 11:40 hours IST. In last one year, the share of the company plunged 44 per cent.
Sun's profit in March quarter slipped 2 per cent year-on-year to Rs 283 crore, despite a 24 per cent increase in revenue at Rs 888 crore. Muted advertising and subscription revenue growth impacted earnings.
At the operating level, EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 16 per cent to Rs 608 crore and margin contracted 450 bps to 68.4 per cent compared to the year-ago period.
Numbers were far below analyst expectations. CNBC-TV18 poll estimates for profit were Rs 353 crore and revenue Rs 936 crore. EBITDA was estimated at Rs 675 crore and margin at 72 per cent for the quarter.
Sun TV posted weaker-than-expected operating results, with advertisement and subscription growth impacted by the implementation of the New Tariff Order (NTO).
Viewership market share of its flagship channel, SUN TV (Tamil), has remained subdued, while management expects incremental investments in original content to revive the market share going forward.
Advertising revenue growth was flat in Q4FY19 against expectations of 5-7 per cent growth, while subscription revenue growth was 4 per cent during the quarter against expectations of 15-17 per cent.
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