800 cr due to this ? It opens itself us to its worst detractors ( and I am not one of them ) who will point out that the promoters massive compensations have remain intact whilst investors have been short changed.įor the record it generated a nett effective cash flow, less investments and dividend paid, of INR 1412 cr vs INR 1418 cr last year. Similarly, in an environment where the entire organized corporate sector is cautiously optimistic at worst, is it not surprising that Sun TV - with its recession proof business model - should attempt to casually explain away it dividend cut of Rs. Arguably the second wave which hit us recently caught them unawares but which by itself reflects on its risk management framework and judgment. Even as late as last quarter the management affirmed a bullish outlook to the business. 10, Rs 12.5 and Rs 25 as dividend vs Rs 5 this year. Over the last few years it has paid out Rs. Sun TV’s massive cash balances and consistent dividend record is priced into the stock.
Sun tv new year programs 2018 plus#
In other words, the company can survive for 3 years plus with no revenue whatsoever ! Surely the management does not believe the pandemic’s impact will be so grave on a company with such a robust business model !
Its gross expenditure nett of depreciation and amortization is approximately INR 1150 cr. This includes cash, bank and treasury investments. As of date it has enormous financial assets, excluding non current assets and trade receivables, of INR 3750 cr. And whilst one can argue on its intent and ability to expand beyond its current avatar, the quality of its niche offerings, focused customer segmentation and innate strength of the business model suggest a virtual recession proof ability to generate cash. Sun TV is a virtual cash generating machine which simply spews up cash year after year. Couple of analysts who attended the conference call also confirmed to me that the only reason the management diffidently gave was that the Board decision was predicated due to the uncertainties of the pandemic ! The massive cut in dividend from INR 985 cr to INR 197 cr in the current year has been completely glossed over in the release. The latest example is of the current earnings release containing the year end results for FY 21 being completely silent on the issue of a final dividend for the year. Whilst the first set of issues have been decided in a court of law and the second set is a matter of opinion whose impact will be known only in hindsight, it is the third set of governance perception issues which cause the most damage to the stock’s perceived value. The answer perhaps lies in its fair share of political controversies, perceived lack of management dynamism with respect to expansion into new territories and newer technology platforms, and governance perception related matters over the last decade. It is mysterious though that despite this it has failed to create sustainable value over the last many years and has had subdued stock performance with a CAGR of 5% excluding dividends over a 15 year period.
And unlike many other promoter driven companies the quality of its balance sheet which complements a great P/L is truly commendable. I chanced upon the earnings release of the annual results of Sun TV over the weekend and, though I do not own shares or follow its progress regularly, I have admired the company for its consistent performance over the years.