Mumbai, August 8, 2025 Brokerage firm Motilal Oswal Financial Services has kept a Neutral rating on Sun TV Network with a 12 month target price of 600. The updated target involves continuing difficulties in advertising revenues, increase in the cost of operations and the conservative attitude towards current expansion efforts.
In the first quarter of FY26, Sun TV recorded a revenue decrease of approximately 2 percent year-on-year driven by a steep decline of 10 percent in advertising revenue. The operating profit (EBITDA) decreased by almost 13% compared to the last year, and it was more than 11% lower than the estimation of analysts. The company blamed this poor performance to the persistent strain on costs, which has burdened margins.
To aggravate the pessimistic view, Sun TV has just bought a UK based sports franchise called Northern Superchargers latest, at a price of GBP 100 million. Although the shift is a pioneering venture into the field of sports media globally, analysts at Motilal Oswal feel that the investment is costly and its returns are not guaranteed especially with the changing dynamics of broadcasting rights.
The valuation model of the brokerage includes the core television business of the network, its sports properties including the Sunrisers Hyderabad IPL franchise, and the recent purchase of a UK team as well as its cash reserves. This gives an estimated fair value of 600 rupees a share, or about 14 times estimated FY27 earnings.
Motilal Oswal adds that weak ad revenues, elevated production cost, and the risk posed by overseas investment are some of the factors that should make it neutral at the present moment. Although Sun TV is a market leader in South Indian broadcasting with a solid brand equity, the short term perspective indicates that there is little upside potential unless there is a significant revival of advertising demand or a quicker-than-anticipated payoff in its new sports investments.
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