Sun TV Network Ltd. rose as much as 26.6 percent, the most since its April 2006 listing, after a court acquitted the promoter in the Aircel-Maxis case, and brokerage house CLSA upgraded the stock.
A special Central Bureau of Investigation (CBI) court on Thursday dropped all charges against Sun TV promoter Kalanithi Maran and his brother and former Telecom Minister Dayanidhi Maran in two cases lodged by CBI and the Enforcement Directorate (ED).
Bullish Call
CLSA upgraded the stock to a ‘Buy' with a target price of Rs 661, and said that the acquittal of the Maran brothers ended a long legal overhang over the company. “With improving TV ratings, the company is well placed to grow its network advertising,” it wrote in a note to clients.
The brokerage said the company's subscription revenues are likely to benefit from the digitisation push. Subscriptions are expected to grow at a compounded annual growth rate (CAGR) of 15 percent over the financial years 2016-17 to 2018-19, while ad revenues are expected to grow at a 12 percent CAGR over the same period, according to CLSA.
None of the 22 media analysts tracked by Bloomberg have a "Sell" rating on the stock. 73 percent of analysts have a “Buy” rating, and the remaining 27 percent have a “Hold” rating.
Sun TV shares were trading 25.6 percent higher at Rs 693 apiece as of 10:35 a.m.
Also Read: Aircel-Maxis Case: CBI Court Drops All Charges Against Maran Brothers
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