Weak signals emerge for Sun TV due to lower OTT spending, ad growth

Muted dividend amid a mountain of cash did not go well with investors

After falling over 3 per cent after its results last week due to lower dividend distribution, the Sun TV Network stock has recovered a bit. In addition to pay out ratio, slower advertising growth compared to peers, market share loss in non-Tamil genres and lower investments in over the top application (OTT) were the other concerns. 

The near term negative view on the stock, according to Naval Seth and Sonali Shah of Emkay Research was the steep reduction in dividend payout to 13 per cent (Rs 5 per share for FY21) as compared to an average of 49 per cent