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Buy This Media Stock Which Is Debt Free, Near 52-Week Low & Good Dividends

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It was carnage across the markets this week, with the indices losing 3.5%, as Foreign Institutional Investors continued to sell into stocks on rising bond yields. This has enabled some stocks to become cheaper and more attractive. One such stock is the stock of SUN TV Network.

 

Sun TV Network: Leading player in the South

Sun TV Network: Leading player in the South

Sun TV Network Limited, is one of the largest Television Broadcasters in India, operates Satellite Television Channels across five languages of Tamil, Telugu, Kannada, Malayalam and Bangla, airs FM radio stations across India and owns the SunRisers Hyderabad Cricket Franchise of the Indian Premier League.

The company keeps declaring dividends at least 2 to 3 times every year. The dividend yield translates to dividend around 1 to 2%.

The company is also a debt free company, which is good as interest rates are slated to rise in the economy.

SUN TV: Good performance for the quarter ending Sept 30, 2021
 

SUN TV: Good performance for the quarter ending Sept 30, 2021

For the quarter ended September' 30, 2021, the company reported revenues that were higher by 3.69 per cent at Rs. 520.58 crores as against Rs. 502.03 crores for the previous quarter ended September 30' 2020.

Current market price52-week high52-week lows
Rs 495Rs 606Rs 450

The profit before taxes for the quarter rose by 14.51% to Rs. 527.58 crores as against Rs. 460.74 crores for the previous quarter ended 30th September'2020. The profit after taxes for the current quarter ending Sept 30, 3032 rose by 13.71 % to Rs.393.32 crores as against Rs. 345.91 crores for the previous quarter ended 30th September' 2020.

Valuation and view on SUN TV

Valuation and view on SUN TV

The company reported an EPS of Rs 10.04 for the quarter ending Sept and almost similar for the June quarter. If you annualize the same, we can expect an EPS of Rs 40 for 2021-22. The stock at a price of Rs 495 is discounted around 12 times. The average multiples in the markets are significantly higher. For example, the p/e multiple for Sensex stocks is currently 22 times. If we accord even a p/e multiple of 18 times for SUN TV, given its debt free status and strong brand equity, including the SunRisers Hyderabad Franchise and RedFM, the stock should trade at Rs 720 at the very least. Buy the stock of SUN TV for long term gains.

 Disclaimer

Disclaimer

Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article. The author and is family do not hold shares in any Sun TV Network. Caution is advised before investing in the markets.

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