Shares of Sun TV dived nearly 7.5 percent on Monday despite the media and entertainment company reporting a higher profit in the June quarter.

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The shares traded at Rs 766.95, down 7.31 percent on the BSE at 2.43 pm.

The company reported a near 63 percent rise in net profit to Rs 409.14 crore for the quarter ended June 30.

Brokerage firm Emkay Global Financial Services maintained "hold" rating on the Sun TV stock, with a price target of Rs 869. The brokerage sees limited upside in the stock as the likely subscription growth due to the digitisation of Tamil Nadu and advertisement revenue growth from new channel launches has been factored in.

Besides, the lack of a focused digital strategy by the company is perturbing, especially at a time when digital media consumption is growing at a fast pace and is expected to accelerate further, the report said.

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With inputs from Cogencis