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Sun TV Network

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28 June 2020

4QFY20 Results Update | Sector: Media

CMP: INR421

TP: INR500 (+19% )

Buy

Ad outlook bleak; subscription growth remains high



Slowdown in ad spend, a high base of movie revenues, and loss of IPL

revenues have led to an overall drop in revenues and EBITDA, partially

offset by strong growth in subscription revenues.

Ad revenue is expected to drop 20% going ahead in FY21E, while

subscription revenues would grow at 12% in FY21E. We have thus cut our

FY21E/FY22E EPS by 4%/1%.

Bloomberg

Equity Shares (m)

M.Cap.(INRb)/(USDb)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

12M Avg Val (INR M)

SUNTV IN

394

166 / 2.2

551 / 260

-8/9/-8

1021

Advertisement continues to drag down performance; subscription

revenues remain stable



Financials & Valuations (INR b)

FY20 FY21E FY22E

Y/E March

Sales

34.0 30.8 38.2

EBITDA

22.4 19.3 25.1

Adj. PAT

13.7 12.8 15.4

EBITDA Margin (%)

65.7 62.9 65.8

Adj. EPS (INR)

34.8 32.4 39.1

EPS Gr. (%)

-1.7 -6.9 20.6

BV/Sh. (INR)

142.7 146.2 156.4

Ratios

Net D:E

-0.5 -0.6 -0.3

RoE (%)

24.8 22.4 25.8

RoCE (%)

24.9 22.5 25.9

Payout (%)

82.9 89.1 73.9

Valuations

P/E (x)

12.1 13.0 10.8

EV/EBITDA (x)

2.9

2.7

EV/Sales (x)

6.2

6.8

6.0

Div. Yield (%)

5.9

FCF Yield (%)

6.9 12.0

8.9

Shareholding pattern (%)

As On

Mar-20

Dec-19

Promoter 75.0

75.0

DII

7.2

8.2

FII

9.0

8.7

Others

8.8

8.2

FII Includes depository receipts



Revenues were lower by 17% YoY at INR7.3b (in-line), largely attributed to a

fall in ad revenues by 15% YoY, a high base of movie revenues in the

corresponding quarter, and nil revenues from IPL games (INR570m) as the

season has been postponed on account of the COVID-19 crisis. However,

subscription revenues grew 22% YoY, albeit they declined QoQ.

Production/SG&A costs were down 28%/19% YoY, which resulted in a 17%

YoY drop in opex.

EBITDA, thus, fell 17% YoY to INR5b (in-line), whereas EBITDA margins stood

firm at 68.5% (flat YoY).

Depreciation charges were higher due to high amortization charges for

movie premiers; thus, PBT fell 25% YoY to INR3.2b.

PAT was down 12% YoY (22% miss) to INR2.5b, with PAT margins at 38%.

FY20 revenues/EBITDA fell 7%/13% YoY to INR34b/INR22b, and margins

contracted by 430bps to 65.7%.

FY20 PAT fell 2% YoY to INR13.7b, with margins contracting by 180bps to

40.3%. FY20 dividend stood at INR25/share.

Highlights from management commentary



Mar-19

75.0

7.1

9.5

8.4



Ad revenues in FY21 could potentially decline 15–20%, while subscription

revenues may grow in the double digits. The company is witnessing good

traction in ad revenues since the partial lifting of the lockdown in May’20.

All the channels have seen good growth in viewership. The company is

expected to maintain better GRP than competitor channels even post the

launch of new shows.

The company has held its ad prices in 1QFY21; this is very important as it is

becoming difficult to recover lost pricing in ad markets. SUN NXT OTT now

has over 15.5m viewers.

Receivables are not expected to rise significantly as the company has been

strict with its collections, while many cable companies have moved to the

prepaid format.

Along with a healthy balance sheet, the company is exploring inorganic or

movie library opportunities to aid expansion in the Media industry.

Research Analyst: Aliasgar Shakir

(Aliasgar.Shakir@motilaloswal.com); +91 22 6129 1565

Suhel Shaikh

(Suhel.Ahmad@MotilalOswal.com); +91 22 6129 1568;

Anshul Aggarwal

(Anshul.Aggarwal@motilaloswal.com); +91 22 6129 1559

Investors are advised to refer through important disclosures made at the last page of the Research Report.

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Sun TV Network

Valuation and view



Subscription growth looks steady on account of healthy TV viewership and

lucrative growth in SUN NXT OTT, especially in the southern regional markets,

which could add to subscription revenue. However, ad spend is expected to

plummet in FY21E, due to a drop in consumption spend and the ad market being

the last sector to rebound in the current recessionary environment.

We have cut our revenue estimate for FY21E/FY22E by 11%/5% and EBITDA

estimate by 14%/2%, weighed by lockdown-related challenges and a weak

economic outlook. We factor revenue/EBITDA/PAT growth of 6%/6%/6% over

FY20–22E.

At a time when many companies in the Media sector are facing a cash crunch,

Sun TV has a better liquidity position with INR5.2b in cash, which would help it

maintain a stronger position in the current crisis. Sun TV’s leading channels have

witnessed significant improvement in viewership ratings across genres in the

current lockdown phase as well, and the company is likely to hold its ratings

going ahead.

The stock trades at 11x FY22E EPS. We value Sun TV at 13x FY22E P/E to arrive at

target price of INR500. Maintain Buy.

(INR m)

8,889

24.0

2,805

6,084

16.5

2,419

673

4,336

1,506

34.7

2,831

-2.3

11,014

-1.7

4,185

6,829

-7.1

1,585

567

5,791

1,972

34.1

3,819

-6.7

FY20

2QE

7,739

3.3

3,052

4,687

-15.4

1,444

721

3,945

280

7.1

3,665

4.3

FY19

8,150

-9.9

2,346

5,804

-13.0

1,436

636

4,985

1,250

25.1

3,735

6.3

7,352

-17.3

2,317

5,035

-17.2

2,328

570

3,259

759

23.3

2,500

-11.7

36,633

28.0

10,990

25,643

30.9

6,467

2,200

21,359

7,411

34.7

13,949

27.6

FY20

34,254

-6.5

11,899

22,355

-12.8

6,793

2,495

17,979

4,261

23.7

13,718

-1.7

4Q Est Var

FY20E

(%)

7,429

-1

-16.4

2,201

5,228

-4

-14.1

-316

1,447

645

-12

4,408

-26

1,190

27.0

3,218

-22

13.7

Standalone - Quarterly Earnings Model

Y/E March

Revenue

YoY Change (%)

Total Expenditure

EBITDA

YoY Change (%)

Depreciation

Interest

Other Income

PBT

Tax

Rate (%)

Reported PAT

YoY Change (%)

E: MOFSL Estimates

11,204

42.5

3,857

7,347

63.9

1,468

390

6,267

2,175

34.7

4,091

62.6

FY19

7,496 9,045

10.9

32.4

1,956 2,373

5,540 6,672

11.7

35.6

819 1,761

621

516

5,336 5,420

1,823 1,907

34.2

35.2

3,513 3,513

23.4

31.6

Key Performance Indicators

Y/E March

(INR m)

Adv. & Broadcast revenue

Ad revenue contribution (%)

Domestic revenue contribution (%)

Subscription revenue

Domestic contribution (%)

International contribution (%)

Production Costs (%)

EBITDA Margin (%)

EBIT Margins (%)

PAT Margins (%)

E: MOFSL Estimates

3,825

3,543

65.6

56.0

36.5

3,590

3,878

FY19

73.9

71.3

46.9

4,000

3,956

73.8

60.0

38.8

3,530

3,618

68.4

48.8

31.8

3,782

4,379

62.0

52.8

34.7

3,450

4,383

FY20

60.6

51.2

47.4

3,460

4,529

71.2

61.4

45.8

2,950

4,398

FY19

3,782

4,379

FY20E

13,639

17,262

68.5

44.6

34.0

70.0

52.8

38.1

28 June 2020

Sun TV Network

Segmental revenues and other highlights



Ad revenues fell by 15% YoY to INR2.9b (in-line), weighed by a muted economic

outlook and ad spend (especially in major categories such as Automobile, Real

Estate, FMCG, and Consumer Durables) as well as government spend. FY20 ad

revenues fell 6% YoY to INR13.4b.

Broadcasting revenues were down 69% YoY to INR40m, and FY20 broadcasting

revenues fell 64% YoY to INR270m.

International subscription revenues were down 2% YoY to INR410m and FY20

international subscription revenues 8% YoY to INR1.6b.

Domestic cable revenues increased robustly by 53% to INR1.9b on account of

benefits from the NTO regime. FY20 domestic cable revenues grew 58% YoY to

INR7.4b.

DTH revenues rose by 6% YoY to INR2b and FY20 domestic cable revenues 1%

YoY to INR8.7b.

Revenues from films stood at INR8m during the quarter

Exhibit 1: Valuation based on FY22 EPS

Particulars

EPS (INR)

PE multiple (x)

Target Price (INR)

CMP (INR)

Upside (%)

FY22

500

421

19%

Source: Company, MOFSL

Exhibit 2: SUNTV: 1-year forward P/E band

P/E (x)

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0

8.2

24.4

19.4

14.5

Avg (x)

Max (x)

Min (x)

+1SD

32.5

-1SD

11.2

Source: Company, MOFSL

4QFY20 earnings call highlights

Business operations



Sticky viewership:

Reach and viewership have gone up, with stickiness expected

to improve; the company does not expect GRP loss over competitor channels

post the launch of new shows.

Subscription revenues:

Subscription revenues improved by 25% YoY, which is a

positive as revenues are margin-accretive, with lower commission shares;

moreover, they have been aided by the lockdown as TV viewership has

increased.

28 June 2020

Sun TV Network



Amortization charges:

The company has doubled the amortization charges for

4QFY20 on account of premiere screenings, the benefit of which would reflect in

the near future, as fees paid to broadcasters are realized in the first movie

screening.

Channel GRP:

All the channels have seen sound growth; Sun TV’s GRP stood at a

record 1900 for the first time ever. In the lockdown period, the company has

gained 8% viewership in Telugu; Udaya TV ranks first among channels of the

region, and Surya TV has also improved viewership. GRP in Karnataka grew 35–

40% from pre-COVID-19 levels. Other GEC channels saw a drop in GRP post a

few weeks of lockdown.

OTT:

OTT app SUN NXT now has over 15.5m viewers.

COVID-19 impact



Min. impact in 4QFY20:

The impact of COVID-19 was not fully reflected in

4QFY20, but would be majorly witnessed in 1QFY21.

Loss of ad revenue:

The company has been witnessing good traction in ad

revenues from May’20. FY21 ad revenues are expected to decline significantly

by 15–20%.

Ad prices:

The company has held its prices and yield in 1QFY21 to maintain

pricing power in the ad markets. Advertisement yield would improve once new

programs start airing on its TV channels.

Receivables:

Receivables are not expected to rise significantly as the company

has been strict with its collections, and many cable companies have moved to

the prepaid format.

Cost-saving measures:

As margins have been good and its cash position has

been strong, the company has not implemented cuts in employee salaries. Sun

TV would reduce some operating costs, but would not be aggressive in

implementing cost-saving measures.

Content production:

Content production has commenced in various cities, with

markets opening up and production being resumed is some cities. Tamil Nadu is

expected to open up in the next 15 days.

Business outlook



Amortization:

FY21 amortization would stand lower by 50% v/s FY20.

Costs:

IPL-related costs and lower cost of production would lead to lower opex

in 1QFY21.

Ad revenues:

Expect FY21 ad revenues to decline by 15–20%. SUN is expected

to attract advertisers as its channels have witnessed good GRPs, which would

lead to higher ad revenues and yield.

Subscription revenue:

Expect FY21 subscription revenues to grow in the double

digits.

Radio business:

The Radio business has fared better over May–June’20, but

April’20 was bad for business. Radio did not witness orders from the

government in ads, which has impacted radio companies.

Consolidation in Radio:

The Radio industry is expected to consolidate due to a

large number of operators.

IPL profits:

The IPL generates INR2.5b in pre-tax profit for Sun TV, and FY21

would see a similar negative impact if the IPL stands cancelled. Uncertainty

28 June 2020

Sun TV Network



prevails related to IPL sponsorship rules, advertisements, and ticket sales, but

the management remains confident of significant profits from the franchise. Sun

TV pays 20% revenue share to BCCI; if IPL stands cancelled, Sun TV would not

incur any costs.

Opportunities:

The company is exploring opportunities that would aid

expansion in the Media industry.

Movie profits:

Sun TV follows the strategy of making a quick profit with decent

margins from movie production and then selling it to movie distributors, while

retaining the satellite rights, resulting in high margins for the company.

Switch to OTT for movie releases:

South Indian movies depend majorly on

distributors; hence, the company does not plan to distribute movies over the

SUN NXT platforms.

Content acquisition:

Sun TV would continue to seek content for new movies and

its content library.

Exhibit 3: Quarterly Performance (INR m)

INR m

Revenue

Operating expenditure

EBITDA

EBITDA margin (%)

Depreciation & amortization

EBIT

Interest

Other income

PBT

Tax

Effective tax rate (%)

PAT

Adjusted PAT

Revenue Breakup

Advertising

Broadcasting

Total Advertising & Broadcasting

International subscription

Domestic Subscription

- Domestic Cable

- DTH

Total Subscription revenue

Films, IPL and Others

Total

4QFY19

8,889

2,805

6,084

68.4

2,419

3,665

673

4,336

1,506

34.7

2,831

4QFY19

3,400

130

3,530

420

3,198

1,260

1,940

3,618

1,741

8,889

3QFY20

8,150

2,346

5,804

71.2

1,436

4,367

636

4,985

1,250

25.1

3,735

3QFY20

3,410

3,460

410

4,119

2,050

2,070

4,529

161

8,150

4QFY20

7,352

2,317

5,035

68.5

2,328

2,707

570

3,259

759

23.3

2,500

4QFY20

2,910

2,950

410

3,988

1,930

2,050

4,398

7,356

YoY%

-17.3

-17.4

-17.2

4bps

-3.8

-26.1

1,590.9

-15.2

-24.9

-49.6

-1144bps

-11.7

YoY%

-14.4

-69.2

-16.4

-2.4

24.7

53.2

5.7

21.6

-99.5

-17.2

QoQ%

-9.8

-1.3

-13.2

-272bps

62.1

-38.0

0.0

-10.3

-34.6

-39.3

-180bps

-33.1

QoQ%

-14.7

-20.0

-14.7

0.0

-3.2

-5.9

-1.0

-2.9

-94.8

-9.7

4QFY20E

7,429

2,201

5,228

70.4

1,447

3,781

645

4,408

1,190

27.0

3,218

4QFY20E

2,949

3,017

345

4,016

2,004

2,012

4,361

7,429

v/s est (%)

-1.0

5.2

-3.7

-188bps

61.0

-28.4

0.0

-11.6

-26.1

-36.3

-372bps

-22.3

v/s est (%)

-1.3

-41.3

-2.2

18.8

-0.7

-3.7

1.9

0.8

-83.2

-1.0

Source: MOFSL, Company

Exhibit 4: Operating expense breakup (INR m)

Production cost

Employee cost

Other exp

Total Operating expenses

4QFY19

1283

703

819

2,805

3QFY20

1106

710

531

2,346

4QFY20

922

731

663

2,317

YoY%

-28.1

4.1

-19.0

-17.4

QoQ%

-16.6

3.0

25.0

-1.3

4QFY20E

973

708

521

2,201

v/s est (%)

-5.2

3.3

27.4

5.2

Source: MOFSL, Company

28 June 2020

Sun TV Network

Exhibit 5: Estimate change summary

Revenue (INR b)

Old

Actual/New

Change (%)

EBITDA (INR b)

Old

Actual/New

Change (%)

EBITDA margin (%)

Old

Actual/New

Change (bp)

PAT (INR b)

Old

Actual/New

Change (%)

Adj. EPS (INR)

Old

Actual/New

Change (%)

FY20E

34.7

30.8

-11.2

22.4

19.3

-13.8

64.8

62.9

-190.1

13.8

12.8

-7.2

34.9

32.4

-7.2

FY21E

40.0

38.2

-4.6

25.7

25.1

-2.2

64.2

65.8

163.3

15.6

15.4

-1.4

39.6

39.1

-1.4

Source: MOFSL, Company

Exhibit 6: Sun TV maintains leadership in Tamil genre (weekly)

Sun TV

Zee Tamil

60%

40%

20%

2018

2019

2020

Source: BARC, MOFSL

KTV

Colors Tamil

STAR Vijay

Exhibit 7: Gemini TV stands second in Telugu genre (weekly)

Gemini TV

33%

30%

27%

24%

21%

18%

15%

2018

2019

2020

ETV Telugu

Zee Telugu

STAR Maa

Source: BARC, MOFSL

Exhibit 8: Surya TV stands second in Malayalam genre

(weekly)

60%

45%

30%

15%

2018

2019

Asianet

Surya TV

Flowers TV

Mazhavil Manorama

Exhibit 9: Udaya TV stands fifth in Kannada genre (weekly)

40%

30%

20%

10%

Colors Kannada

Udaya TV

Star Suvarna

Zee Kannada

2020

Source: BARC, MOFSL

2018

2019

2020

Source: BARC, MOFSL

28 June 2020

Sun TV Network

Story in charts

Exhibit 10: Standalone revenue down 17% YoY

Revenue (INR b)

EBITDA margin (%)

Source: MOFSL, Company

Exhibit 11: Trend in revenue mix (%)

15.0

10.0

5.0

0.0

-5.0

Source: MOFSL, Company

Ad & Broadcast

International sub

Domestic Cable

DTH

Films and others

Exhibit 12: Ad revenue trend

Advertising revenue (INR b)

-6 -3

-7 -7 -4

YoY growth (%)

Exhibit 13: Broadcasting revenue trend

Broadcast revenue (INR b)

0 2 -1

-11

-14

-8 -7 -7 -14

-15

-8

YoY growth (%)

16 16

-10

-13

-21-20-23

-27

-32

-50-53

-72-69

Source: MOFSL, Company

28 June 2020

Sun TV Network

Exhibit 14: Cable revenue trend

Cable revenues (INR b)

YoY growth (%)

69 74

13 17

0 5

28 24 21

53 58

Exhibit 15: DTH revenue trend

DTH revenues (INR b)

13 16 14 15 11

10 10

15 12

YoY growth (%)

20 21 19

-5

-11

9 8

Source: MOFSL, Company

Exhibit 16: SUNTV: Snapshot (INR b)

Particulars

- Ad revenue (INR b)

YoY growth (%)

- Broadcast revenue (INR b)

YoY growth (%)

Ad and broadcast revenue (INR b)

YoY growth (%)

- DTH revenue (INR b)

YoY growth (%)

- Cable revenue (INR b)

YoY growth (%)

- International revenue (INR b)

YoY growth (%)

Total Subscription revenue (INR b)

YoY growth (%)

Films, IPL and other revenue (INR b)

YoY growth (%)

Total Revenue (INR b)

YoY growth (%)

EBITDA

YoY growth (%)

EBITDA margin (%)

Revenue mix (%)

Ad and broadcast revenue

Subscription revenue

- DTH

- Analog

- International

Films, IPL and other revenue

FY16

12.1

1.1

-3

13.2

5.9

2.3

1.4

9.6

1.2

24.0

17.0

70.8

FY17

11.7

-3

1.0

-8

12.7

-4

6.6

2.9

1.7

11.2

1.7

25.6

17.4

67.9

FY18

13.1

0.9

-16

14.0

7.5

3.9

1.7

-3

13.1

1.6

-7

28.6

19.6

68.5

FY19

14.3

0.7

-13

15.0

8.6

4.6

1.8

15.0

6.6

318

36.6

25.6

70.0

FY20

13.4

-6

0.3

-64

13.6

-9

8.7

7.4

1.6

-8

17.3

2.9

-56

34.0

-7

22.4

-13

65.7

FY21E

10.7

-20

0.3

11.0

-20

9.1

8.5

1.7

19.3

0.5

-83

30.8

-10

19.3

-13

62.9

FY22E

12.8

0.3

13.1

10.0

9.3

1.9

21.2

3.8

664

38.2

25.1

65.8

Domestic revenue

International revenue

Source: MOFSL, Company

28 June 2020

Sun TV Network

Financials and valuations

Standalone - Income Statement

Y/E March

Total Income from Operations

Change (%)

Production Costs

Employees Cost

Other Expenses

Total Expenditure

% of Sales

EBITDA

Margin (%)

Depreciation

EBIT

Int. and Finance Charges

Other Income

PBT bef. EO Exp.

EO Items

PBT after EO Exp.

Total Tax

Tax Rate (%)

Reported PAT

Adjusted PAT

Change (%)

Margin (%)

FY15

22,431

7.0

1,692

2,037

2,558

6,288

28.0

16,143

72.0

5,878

10,265

879

11,114

3,746

33.7

7,369

2.8

32.9

FY16

23,952

6.8

1,815

2,359

2,818

6,992

29.2

16,961

70.8

4,850

12,110

1,075

13,164

180

13,344

4,646

34.8

8,698

8,581

16.4

35.8

FY17

25,583

6.8

2,165

2,563

3,485

8,213

32.1

17,370

67.9

3,911

13,458

1,456

14,903

5,109

34.3

9,794

14.1

38.3

FY18

28,625

11.9

2,862

2,941

3,227

9,030

31.5

19,595

68.5

4,397

15,198

1,397

16,584

5,654

34.1

10,930

11.6

38.2

FY19

36,633

28.0

4,202

3,006

3,781

10,990

30.0

25,643

70.0

6,467

19,176

2,200

21,359

7,411

34.7

13,949

27.6

38.1

FY20

34,044

-7.1

5,456

2,924

3,304

11,684

34.3

22,361

65.7

6,793

15,567

2,489

17,979

4,261

23.7

13,718

-1.7

40.3

FY21E

30,778

-9.6

5,475

2,851

3,106

11,432

37.1

19,346

62.9

3,935

15,411

2,161

17,495

4,724

27.0

12,771

-6.9

41.5

(INR m)

FY22E

38,162

24.0

6,296

3,136

3,602

13,034

34.2

25,128

65.8

6,483

18,645

2,526

21,093

5,695

27.0

15,398

20.6

40.3

Standalone - Balance Sheet

Y/E March

Equity Share Capital

Total Reserves

Net Worth

Total Loans

Deferred Tax Liabilities

Capital Employed

Gross Block

Less: Accum. Deprn.

Net Fixed Assets

Capital WIP

Total Investments

Curr. Assets, Loans & Adv.

Account Receivables

Cash and Bank Balance

Loans and Advances

Curr. Liability & Prov.

Account Payables

Other Current Liabilities

Provisions

Net Current Assets

Appl. of Funds

E: MOFSL Estimates

FY15

1,970

31,827

33,797

221

34,018

38,306

27,563

10,743

6,936

18,224

6,835

6,904

4,480

1,890

375

1,448

16,334

34,018

FY16

1,970

33,206

35,176

219

35,396

15,418

7,089

8,330

8,508

20,980

7,329

7,877

5,763

2,428

383

1,906

139

18,552

35,396

FY17

1,970

38,247

40,218

556

40,773

19,203

8,183

11,021

14,540

17,924

7,238

7,385

3,292

2,726

497

2,034

195

15,198

40,773

FY18

1,970

44,430

46,401

770

47,170

22,972

12,579

10,393

442

24,121

16,949

10,084

3,071

3,791

4,734

577

4,000

157

12,215

47,170

FY19

1,970

52,435

54,405

1,056

55,461

28,402

19,046

9,356

133

30,505

20,700

10,790

4,709

5,199

5,233

1,986

3,073

174

15,468

55,461

FY20

1,970

54,271

56,241

851

57,092

33,372

23,909

9,463

663

29,490

23,552

13,100

5,288

5,164

6,074

2,771

3,094

209

17,477

57,092

FY21E

1,970

55,662

57,633

851

58,484

37,372

29,774

7,598

663

29,490

24,401

8,770

11,753

3,866

3,667

1,096

2,370

201

20,734

58,484

(INR m)

FY22E

1,970

59,681

61,651

851

62,503

41,372

36,257

5,115

663

29,490

31,782

10,873

16,100

4,794

4,547

1,359

2,938

249

27,235

62,503

28 June 2020

Sun TV Network

Financials and valuations

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

BV/Share

DPS

Payout (%)

Valuation (x)

P/E

Cash P/E

P/BV

EV/Sales

EV/EBITDA

Dividend Yield (%)

FCF per share

Return Ratios (%)

RoE

RoCE

RoIC

Working Capital Ratios

Fixed Asset Turnover (x)

Asset Turnover (x)

Inventory (Days)

Debtor (Days)

Creditor (Days)

Leverage Ratio (x)

Current Ratio

Net Debt/Equity

FY15

18.7

33.6

85.8

11.3

69.5

22.5

12.5

4.9

6.8

9.4

2.7

17.8

22.5

22.6

34.2

0.6

0.7

111

9.6

-0.4

FY16

21.8

34.1

89.3

15.5

84.3

19.3

12.4

4.7

6.5

9.2

3.7

22.4

24.9

40.3

1.6

0.7

112

8.6

-0.5

FY17

24.9

34.8

102.1

10.0

48.4

16.9

12.1

4.1

5.9

8.7

2.4

23.5

26.0

46.7

1.3

0.6

103

6.6

-0.5

FY18

27.7

38.9

117.7

10.0

43.4

15.2

10.8

3.6

5.1

7.4

2.4

21.5

25.2

25.3

52.2

1.2

0.6

129

3.6

-0.6

FY19

35.4

51.8

138.1

12.5

40.8

11.9

8.1

3.0

3.8

5.4

3.0

31.2

27.7

63.2

1.3

0.7

108

4.0

-0.6

FY20

34.8

52.0

142.7

25.0

82.9

12.1

8.1

2.9

4.1

6.2

5.9

24.2

24.8

24.9

56.9

1.0

0.6

140

3.9

-0.6

FY21E

32.4

42.4

146.2

25.0

89.1

13.0

9.9

2.9

4.3

6.8

5.9

40.0

22.4

22.5

58.9

0.8

0.5

104

6.7

-0.7

FY22E

39.1

55.5

156.4

25.0

73.9

10.8

7.6

2.7

3.9

6.0

5.9

33.7

25.8

25.9

82.9

0.9

0.6

104

7.0

-0.7

Standalone - Cash Flow Statement

Y/E March

OP/(Loss) before Tax

Depreciation

Interest & Finance Charges

Direct Taxes Paid

(Inc)/Dec in WC

CF from Operations

Others

CF from Operating incl EO

(Inc)/Dec in FA

Free Cash Flow

(Pur)/Sale of Investments

Others

CF from Investments

Issue of Shares

Inc/(Dec) in Debt

Interest Paid

Dividend Paid

Others

CF from Fin. Activity

Inc/Dec of Cash

Opening Balance

Closing Balance

FY15

11,120

5,878

-3,761

-1,174

12,080

-673

11,407

-4,375

7,033

-169

768

-3,775

-18

-6,331

-6,348

1,284

5,620

6,904

FY16

13,163

4,850

-4,550

-260

13,225

-665

12,560

-3,713

8,847

213

-715

-4,214

-20

-7,352

-7,372

973

6,904

7,877

FY17

14,904

3,911

-4,877

-14

13,934

-1,027

12,907

-3,658

9,249

-4,774

-214

-8,646

-10

-4,743

-4,753

-492

7,877

7,385

FY18

16,584

4,397

-5,409

-1,086

14,497

-1,059

13,438

-4,977

8,460

-9,083

1,403

-12,658

-11

-4,743

-4,754

-3,969

6,551

2,582

FY19

21,359

6,467

-7,226

-848

19,769

-1,997

17,772

-5,479

12,293

-5,654

482

-10,651

-17

-5,939

-5,955

1,164

2,582

3,746

FY20

17,989

6,793

-4,254

-2,618

17,988

-1,885

16,103

-6,579

9,524

1,091

1,814

-3,675

-291

-11,877

-12,152

277

3,748

4,025

FY21E

17,495

3,935

-4,724

3,208

19,991

-2,161

17,830

-2,070

15,760

2,161

-78

-11,379

-11,457

6,465

4,025

10,489

(INR m)

FY22E

21,093

6,483

-5,695

-2,155

19,804

-2,526

17,278

-4,000

13,278

2,526

-1,474

-78

-11,379

-11,457

4,347

10,489

14,836

28 June 2020

Sun TV Network

Explanation of Investment Rating

Investment Rating

Expected return (over 12-month)

BUY

>=15%

SELL

< - 10%

NEUTRAL

< - 10 % to 15%

UNDER REVIEW

Rating may undergo a change

NOT RATED

We have forward looking estimates for the stock but we refrain from assigning recommendation

*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within

following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.

Disclosures

The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).

Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the

Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products.

MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on

www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading

Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity

& Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository

Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory &

Development Authority of India (IRDA) as Corporate Agent for insurance products.

Details of associate entities of Motilal Oswal Financial Services Limited are available on the

website at

http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf

MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and

buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other

compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have

any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the

specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even

though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report

MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should

be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant

banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at

https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx

A graph of daily closing prices of securities is available at

www.nseindia.com, www.bseindia.com.

Research Analyst views on Subject Company may vary based on Fundamental

research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from

MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.

Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or

use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.

For Hong Kong:

This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong

Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst

Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of

research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity

to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these

securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not

located in Hong Kong & are not conducting Research Analysis in Hong Kong.

For U.S.

Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under

applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act"

and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and

investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for

distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional

investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document

relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule

15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order

to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities

International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.

The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.

registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public

appearances and trading securities held by a research analyst account.

For Singapore

In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets

services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and

Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in

respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of

which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the

SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and

inform MOCMSPL.

Specific Disclosures

1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.

2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company

3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months

4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report

5 Research Analyst has not served as director/officer/employee in the subject company

6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months

8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months

9 MOFSL has not received any compensation or other benefits from third party in connection with the research report

10 MOFSL has not engaged in market making activity for the subject company

********************************************************************************************************************************

28 June 2020

Sun TV Network

The associates of MOFSL may have:

- financial interest in the subject company

- actual/beneficial ownership of 1% or more securities in the subject company

- received compensation/other benefits from the subject company in the past 12 months

- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the

specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even

though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.

- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies)

discussed herein or act as an advisor or lender/borrower to such company(ies)

- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.

The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report

Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not

consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from

clients which are not considered in above disclosures.

Analyst Certification

The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the

research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

Terms & Conditions:

This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and

may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of

MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature.

The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,

representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The

report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial

instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as

customers by virtue of their receiving this report.

Disclaimer:

The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed,

in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose

and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report

constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities

discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives,

financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document

should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including

the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be

suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade securities - involve substantial

risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions

contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as

endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and

alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from time to time, effect

or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment

banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct and

independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already

available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the

views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other

person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of

or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject

MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category

of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors,

employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may

arise from or in connection with the use of the information.

The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any

and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold

MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,

expenses that may be suffered by the person accessing this information due to any

errors and delays.

Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website

www.motilaloswal.com.CIN

no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,

Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.

Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:

INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company

Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management

Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of

Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a

group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory

services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee

of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj

Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.

* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National

Company Law Tribunal, Mumbai Bench.

28 June 2020