Sun TV slumps 10% as Q1 profit dips

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Shares of Sun TV Network crashed 10.50 per cent to ₹818.45 on the BSE after the Chennai-based company posted underwhelming Q1 FY25 results, forcing brokerages to downgrade the stock.

The media giant on Friday posted a 6.21 per cent decline in standalone net profit at ₹546.94 crore in Q1-FY25 as against ₹582.80 crore in Q1 FY23. Topline too dipped 3.16 per cent to ₹1,276.11 crore (₹1,317.78 crore). The company declared an interim dividend of ₹5 per equity share for FY 2024-25. The EBITDA for the quarter stood at ₹706.36 crore (₹786.46 crore).

Downgrading the stock from Buy to Neutral, Motilal Financial Services said the prolonged weakness visible within ad revenue has hit revenue growth. Recovery within ad spends and signs of revival in the FMCG segment would remain the key monitorables for the stock. “The continued conservative approach towards investments in OTT, with the focus remaining on movie production and monetisation of its existing library, however, remains a key risk within the fast-growing OTT space,” it further said while setting the target price at ₹860.

Sun TV’s share price has surged 50 per cent in the past six months, said Elara Securities. “We believe the core broadcasting business is currently trading at a fair 17x one-year forward P/E (largely in line with core broadcasting average forward P/E of 18x in the pre-Covid era, when revenue growth was in double digits). This is factoring in low growth prospects (revenue CAGR of 5.5 per cent in FY25E-27E).”

Elara Securities has downgraded the stock to Reduce from Buy as valuations for the core broadcasting are fair, given muted growth prospects. However it increased the target price to ₹860 from its earlier projection of ₹800.

Similarly, Kotak Institutional Equities downgraded Sun TV from ‘Add’ to ‘Sell, with a revised target price of ₹830. “Given the sharp rise in the stock, the core TV business is now trading at 12X September 2026E earnings, after accounting for ₹9,100 crore valuation for the IPL team and excluding ₹8,550 crore in cash (September 2025E),” the brokerage said.

ICICI Securities bullish

However, ICICI Securities and JM Financial remained bullish on the stock.

ICICI Securities said, “We value the stock at a revised target price of ₹1,140 (earlier ₹1,000) based on 20x 1- year forward (earlier 17.8), as we roll forward its valuation by three months. “We believe there is further room for re-rating given the tailwinds in the media space; hence, we maintain Buy on the stock,” it said.

According to JM Financial, despite the up-move, the stock trades at 12x FY26E core EV/PAT – below Filesadmin.co Entertainments. “Sun TV’s stable operations (54 per cent adj. EBITDA margin), healthy cash generation (13 per cent FCF CAGR over FY20-24) and pole position in South India’s TV landscape merit better multiple than ZEEL, in our view,” it said adding that “We maintain BUY with a revised TP of ₹1,180 (from ₹750).”