Buy Sun TV Network; target of Rs 725 : ICICI Securities

ICICI Securities's research report on Sun TV Network

Sun TV’s ad revenue in Q2FY26 was weak (down 12.9% YoY) as FMCG companies continued to divert budgets towards digital platforms. However, subscription revenue grew 9% YoY. The company had acquired 100% stake in Sunrisers Leeds Limited, diversifying cricket revenue beyond IPL. This has contributed INR 945mn in revenue and INR 222mn in PBT. Movie distribution contributed INR 3.8bn (up from 1bn in Q2FY25) aided by ‘Coolie’ success. Interim dividend was INR 3.75/share. We believe a higher payout ratio in FY26 would be a key trigger for the stock. Given INR 78bn of cash in hand and inexpensive valuations, we maintain BUY; advertising revenue recovery remains a key monitorable.

Outlook

We value the stock at an unchanged TP of INR 725, based on ~17x 1-year forward EPS (FY27E). Key risks: Slower-than-expected recovery in ad spends in GEC; and decline in revenue from IPL.