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Our Bureau

Chennai, Dec. 2 The patch-up between the families of the Tamil Nadu Chief Minister and President of the DMK party, Mr M. Karunanidhi, and the Maran brothers, the promoters of Sun TV Network Ltd, boosted the stock of the media company.

Sun TV stock gained 12.85 per cent at Rs 142.3 over the previous day’s close of Rs 126.1 on the NSE with 15.18 lakh shares changing hands. On the BSE, the stock jumped 14.32 per cent at Rs 144.1 (Rs 126.05).

Traded volumes stood at 5.01 lakh share against the two-week average volume of 2.44 lakh shares.

On Monday, Mr Karunanidhi met his estranged grand nephews, Mr Kalanidhi Maran and his brother Mr Dayanidhi Maran, in Chennai and “sorted out their differences.”

However, according to a Mumbai-based broker, the sharp rise in share price is a temporary phenomenon.

The stock price movement depends on the whole market sentiment, which is unlikely to improve in near future.

Centrum Broking research report said: “We believe Sun TV will continue to enjoy the highest advertisement rates in southern India due to its dominant position and high TRPs. It is the only broadcaster to have increased its rates in this market on a consistent basis.

“Sun TV Network raised its ad rates in February 2008 by 5-25 per cent, depending on the time slot and channel, with an average hike of 13 per cent while the previous hike was in January 2007.

“The company’s rates still constitute merely 10-15 per cent of the Hindi general entertainment channel’s advertisement rates and hence the scope for improvement is huge.”

In September 2008, the company entered into film production business through its new division, Sun Pictures.

The company posted a 35 per cent jump in net profit at Rs 108.31 crore for the quarter ended September 2008 as against Rs 80.16 crore for the quarter ended September 30, 2007.

“Structural shift in digital distribution market in India, sustainable high advertising revenues, steady broadcasting revenues and higher radio advertisement revenues will likely help the company register consolidated revenue CAGR of 26.1 per cent over FY08-10E,” the Centrum report added.

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