Sun TV shares up 11% on better Q1 show, positive outlook

MUMBAI: Shares of Kalanithi Maran-owned Sun TV have surged about 50 per cent in less than two weeks on expectations that the government may give security clearance for its TV channels. Sun shares rose 11.2 per cent to Rs 374 on Monday as brokerage houses turned positive on better than expected first quarter earnings.

Sun shares were at the receiving end after the government said it was not in favour of reviewing its decision to block the broadcasting licence of the company. Between June 5 and July 22, the stock fell 30 per cent to a 52-week low.

The Delhi High Court's decision last week to allow the company to participate in auctions for FM radio licences revived sentiment. “Market participants are anticipating that Sun TV may soon get security clearance. We were also positively surprised by the quarterly results,” said Ravi Shenoy, assistant vice president at Motilal Oswal.

Trading volumes were also higher at 15 lakh shares on BSE compared to last two-week average of 5 lakh shares. Citigroup has upgraded the stock to ‘buy’ from ‘sell’ and has raised its price target to Rs 415 from 390. Aashish Upganlawar, analyst at Elara Capital, said, “We believe the stock is trading below bear case valuations. Hence, the risk-reward ratio is favorable with 45 per cent potential upside from the current levels. We recommend a ‘buy’ rating with a price target of 544”.