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Sun TV: Shining bright - Printable Version

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Sun TV: Shining bright - Sathish - 11-17-2009

Driven by 37 per cent year-on-year growth in advertising revenues, Sun TV’s revenues jumped 35 per cent in the September 2009 quarter to Rs 320 crore, way ahead of the street’s estimates. Advertising revenues in the June 2009 quarter had risen 8 per cent, partly because marketers had earmarked spends for the IPL cricket tournament.

<img style="float:left; margin:0px 10px 0px 0px;" src="" />The broadcaster’s net profit of Rs 130 crore in the September quarter, up 21 per cent year-on-year, though was only marginally higher than what analysts had expected. The early onset of the festival season this year, reviving the consumer spends, has obviously helped broadcasters since it has prompted, car makers, FMCG firms and telcos to spend more on promoting their brands.

With an undisputed hold over three of the four southern states, Sun TV has been able to cash in on the recovery in ad spends. However, the management is a tad cautious with its outlook and has indicated 20 per cent growth for the current year. That probably because, although, the broadcaster’s ratings in the states of Andhra Pradesh and Karnataka, had been trending down in the early part of 2009, may have improved, Zee remains a strong competitor.

Meanwhile, subscription revenues are gathering pace and DTH revenues grew 10 per cent sequentially to Rs 40 crore, though international subscription revenues remained flat. Sun’s domestic subscriber base has now crossed the 5-million-mark. The radio business — Sun now operates 42 stations — could end up with losses of Rs 40 crore this year.

Sun Pictures, which has a rolling budget of Rs 70 crore for films, released just one film during the quarter while posting revenues of Rs 3 crore. Analysts believe current valuations of close to 22 times estimated 2010-11 earnings factor in near term upsides; they are also somewhat concerned about the risks of investing free cash into businesses such as radio and films.