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What is the story about?
Sun TV Network Limited shares rose as much as 3.64% on Monday, February 9, breaking its four-session losing streak, even as the broadcaster reported a muted operating performance for Q3FY26, with profitability pressured by a sharp rise in costs.
For the December quarter, revenue rose 4% year-on-year to ₹862.2 crore, aided by steady advertising traction. However, EBITDA declined 5.6% YoY to ₹419.6 crore, as other expenses surged 47% to ₹109.2 crore, weighing on operating leverage. As a result, EBITDA margin contracted sharply to 48.7% from 53.7% a year ago.
Net profit for the quarter fell 10.7% YoY to ₹324 crore, compared with ₹363 crore in Q3FY25. Profitability was also impacted by an exceptional charge of ₹5.1 crore, linked to the implementation of changes under the new labour code.
Beyond the quarterly performance, analysts see a potential positive trigger for Sun TV from the valuation of its IPL franchise SunRisers Hyderabad, which the broadcaster owns outright. The latest bids value Royal Challengers Bengaluru at around $1.5–1.7 billion (₹13,500–15,000 crore), highlighting the sharp re-rating underway across IPL assets.
According to Houlihan Lokey’s FY25 IPL brand valuation, RCB — the reigning champions — is currently the most valuable franchise at $269 million. Analysts believe back-to-back Women’s Premier League (WPL) wins could further support higher franchise valuations across the league.
In comparison, SunRisers Hyderabad’s brand value was pegged at $154 million, implying an estimated valuation range of ₹7,700–₹8,550 crore. With Sun TV’s current market capitalisation at around ₹21,000 crore, SRH’s implied contribution works out to roughly 30% of the group’s valuation, or close to ₹7,000 crore, indicating potential upside if IPL asset valuations continue to re-rate.
Elara Capital values Sun TV’s IPL business at the upper end of around ₹8,550 crore and sees an upside of nearly 30%, with a target price of ₹700 per share.
Operationally, analysts noted that while subscription revenue rose 9% year-on-year in Q3FY26, advertising revenue remained a drag. However, they said the trend is visible across the broader media industry. The sharp 47% rise in other expenses further weighed on margins during the quarter.
The December quarter also marked the first full quarter to include Sunrisers Leeds Ltd, following its recent acquisition, which could have implications for cost structures and consolidation going forward, analysts said.
While top-line growth remained modest, the spike in expenses — particularly in other operating costs — emerged as the key drag on earnings during the quarter.
Despite the weaker Q3 results, the stock surged in early Monday, and is currently trading near its intraday highs, 3.63% up at ₹556.50. The stock has declined 8.11% in the past year.
For the December quarter, revenue rose 4% year-on-year to ₹862.2 crore, aided by steady advertising traction. However, EBITDA declined 5.6% YoY to ₹419.6 crore, as other expenses surged 47% to ₹109.2 crore, weighing on operating leverage. As a result, EBITDA margin contracted sharply to 48.7% from 53.7% a year ago.
Net profit for the quarter fell 10.7% YoY to ₹324 crore, compared with ₹363 crore in Q3FY25. Profitability was also impacted by an exceptional charge of ₹5.1 crore, linked to the implementation of changes under the new labour code.
Beyond the quarterly performance, analysts see a potential positive trigger for Sun TV from the valuation of its IPL franchise SunRisers Hyderabad, which the broadcaster owns outright. The latest bids value Royal Challengers Bengaluru at around $1.5–1.7 billion (₹13,500–15,000 crore), highlighting the sharp re-rating underway across IPL assets.
According to Houlihan Lokey’s FY25 IPL brand valuation, RCB — the reigning champions — is currently the most valuable franchise at $269 million. Analysts believe back-to-back Women’s Premier League (WPL) wins could further support higher franchise valuations across the league.
In comparison, SunRisers Hyderabad’s brand value was pegged at $154 million, implying an estimated valuation range of ₹7,700–₹8,550 crore. With Sun TV’s current market capitalisation at around ₹21,000 crore, SRH’s implied contribution works out to roughly 30% of the group’s valuation, or close to ₹7,000 crore, indicating potential upside if IPL asset valuations continue to re-rate.
Elara Capital values Sun TV’s IPL business at the upper end of around ₹8,550 crore and sees an upside of nearly 30%, with a target price of ₹700 per share.
Operationally, analysts noted that while subscription revenue rose 9% year-on-year in Q3FY26, advertising revenue remained a drag. However, they said the trend is visible across the broader media industry. The sharp 47% rise in other expenses further weighed on margins during the quarter.
The December quarter also marked the first full quarter to include Sunrisers Leeds Ltd, following its recent acquisition, which could have implications for cost structures and consolidation going forward, analysts said.
While top-line growth remained modest, the spike in expenses — particularly in other operating costs — emerged as the key drag on earnings during the quarter.
Despite the weaker Q3 results, the stock surged in early Monday, and is currently trading near its intraday highs, 3.63% up at ₹556.50. The stock has declined 8.11% in the past year.
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