Sun TV Network Ltd’s fiscal second quarter profit rose 11.5%, missing analysts’ estimates, as advertisement revenue dropped, sending its shares down 5.6%.

The Chennai-based broadcaster reported a net profit of 169 crore for the quarter ended 30 September from 152 crore in the previous year. That compares with the 179.8 crore profit estimate by analysts surveyed by Bloomberg.

“Advertisement revenue growth is a disappointment for the second quarter because this is before the ad cap mandated in October," said a Mumbai-based analyst who tracks Sun TV but did not want to be named.

Prime-time advertisement rates was increased on Sun TV with effect from 15 July by an average of 19%.

The fall in advertisements clearly shows that the advertisement rate increase has depressed demand, said the analyst.

Sun TV Network did not have the usual conference call with analysts after it announced the financial results on Friday.

Revenue and net profit performance was lower than our estimates, said Amit Patil an analyst who tracks media at Angel Broking Ltd.

“Revenue grew by only 7.6% to 466 crore compared with our estimate of 493 crore, primarily on account of 4.5% decline in advertising revenue to 234 crore," said Patil.

Advertising revenue is likely to decline further in the third quarter when the broadcast regulator rule that limits advertisement time to 12 minutes per hour comes into effect on 1 October.

The management has, however, assured a revival in advertising revenues in the third quarter and maintained its yearly forecast of 12% growth in advertising revenue for 2013-14, said a Angel Broking note.

“We don’t expect a revival in ad revenues owing to the current economic slowdown, FMCG raw material costs have gone up who will reduce their advertisement spends in the second half of the year and the real impact of ad cap will be felt only in the third quarter," said analysts.

On Friday, Sun TV shares ended trading at 413 on BSE, while the benchmark Sensex fell 0.75% to 20,666.15 points.