Sun TV’s ad revenue in Q2 FY26 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 Ltd., diversifying cricket revenue beyond IPL.
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ICICI Securities Report
We believe, ad revenue for Sun TV Network Ltd. is poised to grow in H2 FY26E over a weak base. Also, revenue from cricketing franchises may grow steadily henceforth.
We believe, given Sun’s inexpensive valuations, the stock is likely to re-rate once there are signs of recovery in ad revenue; hence, we maintain Buy.
We value the stock at an unchanged target price of Rs 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.
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