Tv network

Sun TV Network hits 52-week low, shares down 10% in two trading sessions

Shares of Sun TV Network hit a 52-week low at 402.55 rupees, down 1.5% on BSE in Thursday’s trade in an otherwise firm market. The TV broadcasting and software production company’s stock has fallen 10% in the past two trading sessions, erasing all of its recorded gain after the long-awaited Indian Premier League (IPL) rights for 2023 were concluded. -27.

Shares of Sun TV fell below its previous low of Rs 403 hit on May 19, 2022. As of 10:14 a.m., the stock was trading nearly flat at Rs 409 against a 1.1% rise in the S&P BSE Sensex at 52,387.

Sun TV Network is one of the largest TV broadcasters in India, operates satellite TV channels in six languages ​​of Tamil, Telugu, Kannada, Malayalam, Bangla and Marathi, broadcasts FM radio stations across India and owns SunRisers Hyderabad Cricket Indian Premier League franchise and OTT digital platform Sun NXT.

The significant increase in the cost of media rights is positive for team owners like Sun TV as it would increase the annual profit after tax (PAT) from Rs 73.3 crore in FY22 to Rs 300 crore in FY24. IPL PAT will be fully translated into free cash flow (FCF) for the business as it involves no annual investment or working capital, Emkay Global Financial Services analysts said in the Media Industry Update and entertainment.

The lack of clarity on the strategy of the underlying broadcast and digital (SUN NXT) businesses, as well as the cash stack, limits the creation of meaningful shareholder value, although the action seems inexpensive from the point of view of view of valuation. That said, there could be a slight uptick in trading for the stock. However, due to the aforementioned factors, interest from institutional investors would be low, the brokerage firm said.

The main winner from the whole bidding process would be BCCI and the franchisees who are expected to earn higher annual revenues. Note that from the central pool, BCCI pays 50% of the royalty money to franchisees (5% of which is in the form of prizes). So, this higher bid will likely result in additional annual revenue of Rs 250-300 crore for each team from FY24, including Sun TV-owned Sunrisers Hyderabad.

The bottom line saving will be determined by how the player salary cap (currently at Rs 80 crore) and other expenses change for the franchise, given the availability of higher earnings, the analyst said. ICICI Securities in the Media Sector Update.

Over the past six months, Sun TV has underperformed the market, falling 18%, compared to 9% for the S&P BSE Sensex. While over the past year, the stock has fallen 24%, compared to a 0.07% rise in the benchmark.

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