My today’s tip is to BUY Sun TV Network for two reasons. One is that they are releasing a movie – Endhiran – Robo and the other being the kind of revenue growth this company has been showing for the last several years. Lets discuss both of the factors in detail.

Endhiran Movie

This movie is starring Rajnikanth and Aishwarya Rai and the music is being done by AR Rahman. Rajnikanth has a huge fan following as you already know and music given by AR Rahman must be good as well. It is Asia’s biggest film as of date and is being released world wide dubbed in Hindi and English. It is probably going to be a block buster. Sun TV Network is releasing the movie tomorrow on 1st October and if this movie is a big hit which it should be, then Sun TV is going to make a huge profit out of it. As you know, this news will hit the market and a lot of buying will be seen in this stock. I feel that this movie’s collections will rally the stock to new highs.

Revenue Growth

The most important factor that cannot be neglected is it’s revenue growth. If I look over the company’s fundamentals, the revenue collected over FY09 was 1100 crores and the operating profit is 770 crores, and the profit after tax and depreciation is at 440 crores. A 70% Operating profit and 40% net profit margin is EXCELLENT. Very few companies are out there that gives such an excellent ratio of profit to revenue. The company pays a mere 3 crore interest, which means that the company has hardly got any debt. A mere debt company with a 40% net profit ratio is an excellent choice of investment.

Now looking over the revenues collected over 5 years, then in FY05, it’s income was 300 crores, FY07 was 725 crores and FY09 was massive 1100 crores. The company’s revenue growth is really good. Even the stock has been reacting to such good results and has rallied from 300 rupees to 520 rupees per share in a year. The stock still has a lot of upside momentum left and it is bound to make new highs in times to come.

So my advice is to Buy Sun TV Network for good gains and those who are already sitting in profit, continue to Hold the stock, this is an excellent company.

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