Citi downgrades Sun TV; stock falls 1%

Shares in India's Sun TV Network fell 1.1 percent after Citigroup downgraded the stock to "neutral" from "buy", citing its stronger performance compared with peers recently.

However, Citigroup continues to prefer Sun TV to Zee, which it recently downgraded to "sell". Agencies[/caption]

The gain over the past six months "largely prices in the bottoming-out of Sun's ad revenues and potential benefits from digitalization," Citigroup said in its report. Sun TV shares have risen 25.34 percent since 1 October as of Monday's close, while rival Zee Entertainment Enterprises Ltd gained 10.6 percent in the same period.

However, Citigroup continues to prefer Sun TV to Zee, which it recently downgraded to "sell", saying Sun has stronger presence in key markets, an expected earnings recovery from trough levels and better relative valuations.

Reuters