Shares of Sun TV Network Ltd. declined as much as 7% in Monday’s trading session, weighed down by the company’s disappointing December quarter earnings, which saw margin pressure and a decline in advertising revenue.
Global brokerage firm CLSA has a ‘Hold’ rating on Sun TV and has slashed its price target to ₹670 per share, citing Q3 standalone revenue coming in below estimates, with the miss led by a decline in advertising revenue.
The brokerage said that the company’s subscription revenue saw a modest 2% year-on-year growth.
Sun TV’s margin was further dragged down by the launch of Sun Neo, its Hindi channel.
Additionally, the company secured the winning bid for one of the eight franchise teams in a cricket league in the UK.
Nuvama has also trimmed Sun TV’s FY26 and FY27 earnings per share estimates by 8.4% each, given the company’s weak Q3 performance, particularly in ad revenues.
According to Nuvama, Sun TV has a strong regional presence. However, while national players such as Zee have successfully entered the southern market, Sun TV’s expansion into the northern market needs to be more strategic. That said, with increased viewership, Nuvama expects the bandwidth to widen, while the advertisement revenue base remains robust.
The brokerage mentioned that Sun TV needs to ramp up its presence in the OTT segment. At present, it is recycling linear and movie content for OTT. The company must take a more aggressive approach in creating original content and acquiring movie rights for its OTT platform, in addition to marketing efforts, to capitalise on the fast-expanding digital media segment and strengthen its competitive position.
Nuvama has revised its price target for Sun TV to ₹955 from ₹1,040 earlier while maintaining a ‘Buy’ rating on the stock.
The South India-based broadcaster reported a 20% year-on-year decline in net profit, at ₹363 crore for the quarter. Revenue from operations also fell 10.4% to ₹827.6 crore.
Advertisement revenue declined to ₹332.17 crore, lower than the ₹355.43 crore recorded in Q3 FY24. The drop in ad revenue particularly impacted the broadcaster’s operational performance, with EBITDA margin sharply eroding to 53.7% in Q3 from 63.8% in the year-ago period.
Sun TV declared an interim dividend of ₹2.5 per share. This is in addition to a dividend of ₹5 per share declared at its board meeting in August 2024.
Sun TV shares are currently trading 3.89% lower at ₹607.10. The stock is down 12% so far in 2025. CNBC-TV18