Sun TV shares surge 6% as Avendus upgrades stock to "buy" on strong IPL growth outlook

Sun TV gets 54 percent upside target on IPL growth story

Shares of Sun TV Network rallied 6 percent to Rs 581 apiece on September 2 after brokerage firm Avendus Spark turned bullish on the stock for the first time in five years.

The brokerage upgraded Sun TV to “buy” from “sell” and significantly raised its price target to Rs 680 for the next 12 months and Rs 840 over the next three years. These targets imply an upside potential of 25 percent in the short term and 54 percent over the long term.

Avendus Spark said it now views Sun TV as a fast-growing sports company rather than a stagnating linear TV broadcaster. It highlighted that Sun TV has the highest listed exposure to the Indian Premier League (IPL) among media peers, making it the purest proxy for investors to participate in India’s sports monetisation opportunity.

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The brokerage expects Sun TV’s IPL revenue to grow at a compounded annual growth rate (CAGR) of 9 to 12 percent between 2025 and 2027, reaching Rs 15,000 crore. Its IPL franchise, Sunrisers Hyderabad, is projected to contribute nearly 60 percent to the company’s sum-of-the-parts (SOTP) valuation.

Avendus Spark has applied a 40x price-to-earnings multiple to Sun TV’s IPL business and 10x to its core broadcasting business.

In a strategic move to expand its sports portfolio, Sun TV’s board in July approved the acquisition of a 100 percent stake in Northern Superchargers Ltd., a London-based cricket franchise that competes in The Hundred, a professional league run by the England and Wales Cricket Board (ECB). The deal is valued at £100.5 million (approximately Rs 1,161 crore).

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