Sun TV a market performer, tgt Rs 367: P Lilladher

Prabhudas Lilladher has maintained market performer rating on Sun TV, with target price of Rs 367 in its May 13, 2008 report. "The company is expected to maintain 18% CAGR in revenue over FY07-10E, which will be largely driven by annual ad. rate hikes and increasing subscription revenue from addressable platforms such as DTH. Operating margin is likely to expand by 300bps on the back of improving synergies post amalgamation and increase in DTH-related revenue. Earnings as a result, are likely to grow at 24% CAGR FY07-10E. Our universe of media stocks declined by 39% against the benchmark (Sensex), which declined by 23% in Q4FY08. However, the company maintains its premium valuations; it is trading at 33.2x and 27.9x FY09E and FY10E respectively. We rollover our PER from FY09E to FY10E, at Rs 362 for its broadcasting operations and Rs 4.6 for its radio operations, valuing it at 1x investment value of Rs 1.8 billion. We maintain Market Performer on the company with a target price of Rs 367" according to Prabhudas Lilladher report.