KOLKATA: Despite growth in subscription revenue, Sun TV Network’s profit for the second quarter declined 5.62 per cent to Rs 345.91 crore, from Rs.366.51 crore in the corresponding quarter last year.

The revenues for the quarter stood at Rs 756.16 crore as against Rs 773 .93 crore for the corresponding quarter previous year. The total income for the quarter was at Rs 807.71 crore as against Rs 846.07 crore in Q2 FY19.

However, it has reported a good growth in subscription revenue that is up by 14 per cent year-on-year Rs 427.04 crore compared to Rs 375.65 crore in the same quarter last year. EBITDA for the quarter is up by 7.10 per cent year over year standing at Rs 502.03 crore.

“The stock is currently trading at 12.5x FY22E and 12x FY23E PER, which still appears to be reasonable given the strong balance sheet position, healthy cash reserves and potential buyback/dividend (current dividend yield of 6.25 per cent) which will augur well for investors, and provides upside potential despite weak ad revenues. We maintain accumulate with same TP of Rs 525 on 14.5x (unchanged) one-year forward P/E,” said Elara Capital VP research analyst (media) Karan Taurani.

Taurani added that in terms of weekly viewership share data by BARC, the network has been losing viewership share for three consecutive months, slipping below 40 per cent mark on the back of relaxation of lockdown and resumption of new shows on rival channels in Tamil genre post July 2020. However, he said that the share of flagship channel Sun TV is expected to stabilize and largely move back to pre-Covid levels of over 40 per cent backed by the recently launched three new programs within the GEC genre.