💰 Financial Performance

Revenue Growth by Segment

Total consolidated revenue grew 29.86% YoY to INR 1,168.99 Cr in Q2 FY26. Domestic subscription revenue increased 9.01% YoY to INR 476.09 Cr. Sports/IPL revenue share increased from 8% in FY23 to 16% in 9M FY24. Advertisement revenue declined 4% YoY in 9M FY24 and 8.3% in FY20.

Geographic Revenue Split

South India (Tamil, Telugu, Kannada, Malayalam) remains the core market. The company is expanding into West Bengal and Maharashtra, with Sun Bangla and Sun Marathi channels established to explore newer horizons.

Profitability Margins

Operating Profit Margin (OPM) was 63.7% and Net Profit Margin (NPM) was 45.3% in 9M FY24. FY20 reported OPM of 66.2% and NPM of 39.5%. Q1 FY21 OPM was 66.9% and NPM was 42.1%.

EBITDA Margin

EBITDA margin for Q2 FY26 was 64.15% (INR 749.94 Cr), representing a 41.77% YoY increase in EBITDA value.

Capital Expenditure

Capex has been moderate relative to accruals in recent years, contributing to a superior liquidity position and healthy cash flows. Specific INR Cr values for planned capex are not disclosed.

Credit Rating & Borrowing

Short-term rating of [ICRA]A1+ reaffirmed and withdrawn in April 2024. The company maintains a zero-debt position with negligible finance costs and a net debt negative status.

⚙️ Operational Drivers

Raw Materials

Fiction programming content (60% of total content cost), Non-fiction show formats, Movie broadcasting rights, and Artistic talent.

Import Sources

Domestic (India) for primary content production and regional film rights.

Key Suppliers

Independent content producers, film production houses, and sports media rights holders.

Capacity Expansion

Current capacity includes 35 television channels and 59 FM radio stations. Expansion includes the launch of Sun Bangla, Sun Marathi, and SunRisers Leeds (Northern Superchargers).

Raw Material Costs

Operating costs, including content production and rights acquisition, represent approximately 36% of revenue based on a 64% OPM. Advertisement revenue declined 27% in FY21 due to pandemic-related spend cuts.

Manufacturing Efficiency

High viewership efficiency with Sun TV being the #1 channel in Tamil Nadu/Pondicherry and 5th in India as per BARC data.

Logistics & Distribution

Distribution is managed through DTH (Sun Direct) and cable operators (Kal Media Services), ensuring vertical integration across the value chain.

📈 Strategic Growth

Expected Growth Rate

29.86%

Growth Strategy

Growth is driven by expansion into non-South markets (Bangla, Marathi, Hindi), monetizing a massive fiction content library across linear and OTT platforms, and leveraging increased IPL media rights revenue which now contributes 16% of revenue.

Products & Services

Television channel subscriptions, Advertisement slots, IPL media rights, Radio ad spots, and Movie distribution rights.

Brand Portfolio

Sun TV, Sun Pictures, SunRisers Hyderabad, Red FM, Suryan FM, Sun NXT, Sun Bangla, Sun Marathi.

New Products/Services

SunRisers Leeds (Northern Superchargers) recorded revenues of INR 94.52 Cr in Q2 FY26. Expansion into Hindi language programming is underway.

Market Expansion

Targeting North and East India through regional language channels (Bangla, Marathi) and Hindi content to diversify beyond the Southern states.

Market Share & Ranking

Sun TV is the #1 channel in Tamil Nadu and Pondicherry and consistently ranks among the top 5 viewed channels in India.

Strategic Alliances

Joint Venture with South Asia FM Limited for radio operations.

🌍 External Factors

Industry Trends

The industry is shifting from slot-selling to content ownership and commissioning. Sun TV is positioned for this by retaining content ownership for multi-platform monetization (Linear + OTT).

Competitive Landscape

Intense competition from national broadcasters and niche digital content providers in the regional entertainment space.

Competitive Moat

Durable moat through vertical integration (content creation to distribution), a massive movie library across four languages, and dominant regional brand equity.

Macro Economic Sensitivity

High sensitivity to GDP growth; advertisement revenue (37-42% of total) is vulnerable to economic cycles and corporate marketing spend.

Consumer Behavior

Shift toward digital consumption and OTT platforms, which the company is addressing through its Sun NXT platform.

Geopolitical Risks

Regulatory challenges including licensing, investment limits, and channel distribution ownership restrictions pose ongoing risks.

⚖️ Regulatory & Governance

Industry Regulations

Subject to TRAI distribution orders, FM radio licensing norms, and SEBI Listing Regulations (Regulation 33).

Taxation Policy Impact

Effective tax rate is consistent with Indian corporate standards; NPM of 45.3% vs OPM of 63.7% in 9M FY24.

Legal Contingencies

Pending matters are monitored by the legal team; specific case values in INR Cr are not disclosed in available documents.

⚠️ Risk Analysis

Key Uncertainties

Fluctuations in channel popularity (Operational risk), Piracy of original content (Value erosion), and Treasury investment risk (Financial risk).

Geographic Concentration Risk

High revenue concentration in South India, specifically Tamil Nadu, though diversifying into Bangla and Marathi markets.

Third Party Dependencies

Dependent on independent content providers and artistic talent for programming variety.

Technology Obsolescence Risk

Risk of technological failures in broadcasting and the need to adapt to rapid digital transformation in media consumption.

Credit & Counterparty Risk

High receivables from ad agencies and DTH/cable operators stretch working capital to 33.1% of revenue.