SUNTV - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.5
| Stock Code | SUNTV | Market Cap | 21,340 Cr. | Current Price | 542 ₹ | High / Low | 691 ₹ |
| Stock P/E | 13.0 | Book Value | 306 ₹ | Dividend Yield | 2.76 % | ROCE | 20.4 % |
| ROE | 15.7 % | Face Value | 5.00 ₹ | DMA 50 | 556 ₹ | DMA 200 | 582 ₹ |
| Chg in FII Hold | -0.24 % | Chg in DII Hold | 0.45 % | PAT Qtr | 350 Cr. | PAT Prev Qtr | 529 Cr. |
| RSI | 45.1 | MACD | -4.65 | Volume | 1,00,328 | Avg Vol 1Wk | 1,45,054 |
| Low price | 480 ₹ | High price | 691 ₹ | PEG Ratio | 4.22 | Debt to equity | 0.01 |
| 52w Index | 29.4 % | Qtr Profit Var | -12.2 % | EPS | 39.8 ₹ | Industry PE | 17.7 |
📊 Analysis: SUNTV shows decent fundamentals with ROE at 15.7% and ROCE at 20.4%, indicating efficient capital use. The P/E of 13.0 is below the industry average of 17.7, suggesting undervaluation. Dividend yield of 2.76% provides attractive passive returns. However, the PEG ratio of 4.22 indicates expensive growth prospects, and quarterly PAT has declined (350 Cr. vs 529 Cr.), showing earnings volatility. Technical support lies around 500–520 ₹, with resistance near 580–600 ₹. The ideal entry zone is 500–520 ₹ for margin of safety. For existing holders, a medium-to-long horizon is viable, but partial profit booking near 580–600 ₹ resistance is advisable unless earnings stabilize.
✅ Positive
- Strong ROCE (20.4%) and ROE (15.7%) support efficient capital allocation.
- Attractive dividend yield of 2.76% provides steady income.
- Low debt-to-equity ratio (0.01) ensures financial stability.
- DII holdings increased by 0.45%, showing domestic investor confidence.
- P/E of 13.0 is lower than industry average (17.7), indicating undervaluation.
⚠️ Limitation
- PEG ratio of 4.22 highlights expensive growth valuation.
- Quarterly profit variation at -12.2% indicates earnings pressure.
- FII holdings decreased by -0.24%, showing reduced foreign confidence.
- Stock trading at only 29.4% of 52-week index range, reflecting weak momentum.
📉 Company Negative News
- Sequential decline in quarterly PAT (350 Cr. vs 529 Cr.).
- Weak EPS growth relative to valuation (EPS: 39.8 ₹).
📈 Company Positive News
- Strong dividend yield supports investor returns.
- Operational efficiency reflected in ROCE and ROE.
- Domestic institutional investors increasing stake.
🏭 Industry
- Media and broadcasting sector faces cyclical demand but benefits from digital expansion.
- Industry P/E at 17.7 suggests SUNTV trades at a discount.
- Structural drivers: regional content demand, advertising recovery, and digital streaming growth.
🔎 Conclusion
SUNTV earns a rating of 3.5 due to strong ROE/ROCE and attractive dividend yield but faces earnings volatility and expensive growth valuation. Long-term investors should consider entry in the 500–520 ₹ zone for margin of safety. Current holders may adopt a medium-to-long horizon, with partial profit booking near 580–600 ₹ resistance unless profitability improves. The stock remains a stable dividend play but requires caution on growth expectations.