>Sun TV (AMBIT CAPITAL)

We recently met with the Sun TV management, following are the key takeaways

• Q4FY09 revenue growth estimated at 24% YoY
• No impact of slowdown on advertisement revenues
• DTH segment and increasing addressability to bolster revenue growth
• Revenues from analogue cable segment to grow at 4-5% annually
  

Topline to reach Rs103.8bn in FY09 According to the management, Sun TV's Q4FY09 revenues are expected to grow at 24% YoY to Rs30.6bn. In line with this growth, the company's revenues for FY09 are estimated to touch Rs103.8bn, an upside of 19.3% over FY08. View on advertisement revenues

• Sun TV claimed that it has not yet witnessed any slowdown in its advertisement revenues

• The company indicated that its advertisement slots were booked two months in advance Sun TV believes that if the overall ad revenues for the industry drops, the company will also suffer from lower growth in ad revenues. Nevertheless, according to the management, the company's ad revenues would continue to grow, albeit at a slower pace, but not turn negative in the near term.

• A key positive for the company is that more than 50% its ad revenues come from the FMCG sector that is expected to grow at 10-12% per annum over the next two years.

• Sun TV faces high regional concentration risk as it derives more than 50% of its ad revenues from Tamil Nadu. This remains a key concern.

Radio business Sun TV expects its radio business to breakeven in FY11; losses for FY10 are estimated to stand at Rs600mn.

Movie Segment For FY10, Sun TV's movie budget is estimated to be in the Rs700-800mn range for 9-10 small and medium budget movies. In addition, the company is also planning a big budget movie (amounting to Rs700mn) during FY10.

To see full report: SUN TV