Sun TV Network to be key beneficiaries in phase-II of digitisation drive

MUMBAI: In the last one month, the stock of one of the largest media and entertainment companies Sun TV Network has fallen by 14% as against a meagre drop of 5% in ET Media Index, which is an amalgamation of media and entertainment companies. For investors, it is lucrative to hold onto the company's stock considering the long-term benefits of digitisation in the phase II and III of the digitisation drive.

Considering the reach and penetration of Sun TV Network in terms of its distribution, the company would benefit amply at the end of the phase II of digitisation. At present, the Bloomberg's data of analysts' recommendations show 70% of analysts is bullish on the company's stock and it is expected to touch Rs488 from at present market price of Rs375.

In the phase II of digitisation, Sun Direct, its DTH arm has shown improvement in terms of seeding of boxes. It is estimated that Sun has presence in five cities of phase II of digitisation, which is believed to have a potential subscribers' base of 4 million. An Edeleweiss report on Sun TV says that the company had more DTH subscribers last month, which would convert in high revenues for Sun TV Network.

The Edelweiss report says "Over the long term, the company is expected to see a jump in annual subscription revenues to the tune of Rs120-150 crore due to Phase I and Phase II. Sun TV's DTH Average Revenue Per User stands at Rs39 while DAS ARPU is expected to be at Rs25."