Sun TV Network extends gains, stock soars 9% in two days

Sun TV Network is trading higher by 4.3% at Rs 294, extending yesterday’s 4% plus gain on the Bombay Stock Exchange, after the company said subscription revenues will start increasing from August 2012 in view of the agreement executed with Arasu Cable.

The stock has outperformed the market by gaining 13% in the past six trading sessions, compared to 2.2% rise in the benchmark Sensex, after the company concluded an agreement with Tamil Nadu Arasu Cable TV Corporation Ltd.

According to an analyst at Motilal Oswal Securities, “Sun recently secured a contract with Tamil Nadu state-owned Arasu Cable which is expected to enhance ratings performance being impacted from non-availability of Sun Channels on Arasu.”

The deal will also result in restoration of the analog cable revenue stream from Tamil Nadu although the recovery would only be partial given lower rates being offered by Arasu initially, it added.

A combined 863,343 shares have changed hands on the counter so far on both the exchanges.