🍎 🍕 Less apples, more pizza 🤔 Have you seen Buffett’s portfolio recently?Explore for Free

Sun TV Network shares soar on strong Q3 results, dividend news

EditorHari Govind
Published 14/11/2023, 10:02
© Reuters.
IND50
-
NIFTYMED
-
SUTV
-

CHENNAI - Shares of Sun TV Network (LON:NETW) have reached an annual high this week, following the company's announcement of robust third-quarter results and a generous dividend payout. The Chennai-based broadcaster reported a year-over-year net profit increase of 14.3% to Rs 465 crore and a significant revenue jump of 26.9% to Rs 1,048 crore. Additionally, the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed by 35.5% to Rs 729 crore, with a margin improvement of 4.5 percentage points.

In light of these impressive financials, Sun TV Network declared an interim dividend of Rs 5 per share, which represents a 100% dividend considering the face value. This follows last year's dividends totaling Rs 15 per share and results in a current dividend yield of 2.2%. Over the past six months, the company has delivered nearly a 50% return to its investors, outperforming both the Nifty50 and Nifty Media sector indices.

Analysts from Motilal Oswal Financial Services and JM Financial have reiterated their 'buy' ratings for Sun TV Network. They highlight the company's reasonable valuation and healthy dividend payout as positive factors. Additionally, they point to favorable trends in FMCG spending and potential revenue increases from the new IPL team's valuation and festive demand as reasons for their optimistic outlook.

However, not all industry observers share this bullish stance. ICICI Direct remains neutral on Sun TV Network's prospects, citing potential challenges in the advertising environment and concerns over content spending for over-the-top (OTT) platforms.

Despite these concerns, Sun TV Network is poised to sustain viewership through strategic investments in non-fiction and primetime fiction shows across southern India's regional languages. The broadcaster also maintains a healthy cash balance of Rs 290 crore as of September 2023 but acknowledges the risk of market share loss due to the fierce competition from OTT players and persistent weakness in ad revenue growth. Moving forward, Sun TV Network's content strategy will be pivotal in navigating these challenges and maintaining its growth trajectory.

InvestingPro Insights

In line with the positive financial performance of Sun TV Network, InvestingPro data and tips provide further insights to this upward trend. Sun TV Network, under the ticker SUTV, yields a high return on invested capital and holds more cash than debt on its balance sheet, as reflected in the company's healthy cash balance of Rs 290 crore as of Q3 2023. This aligns with the InvestingPro Tip that highlights the company's impressive gross profit margins and consistent increase in earnings per share.

Moreover, Sun TV Network's stock has been trading near its 52-week high, with a strong return over the last three months and a significant price uptick over the last six months. This resonates with another InvestingPro Tip indicating that the company's stock generally trades with low price volatility.

In addition to these, InvestingPro offers 14 more valuable tips for SUTV, providing a comprehensive guide for potential investors. These tips, along with many more, are included in the InvestingPro product, a tool that can greatly enhance your investing strategies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.