Sun TV Network Ltd Management Discussions

The gures have been stated in Rs. Crore for better readability.

The statements contained in this Management Discussion and Analysis relating to the Companys future prospects are forward-looking in nature and are subject to various risks and uncertainties. The report includes various risks associated with the Companys growth strategy, proposed acquisitions, reliance on certain business segments, availability of quali ed and skilled personnel, and other factors that could impact the Companys operations and performance. Readers are advised to consider these statements in the context of the Companys nancial statements and the accompanying notes forming part of this Annual Report

ECONOMIC SCENARIO

The Indian economy demonstrated strong resilience during FY 2025 26, reinforcing its position as one of the fastest-growing major economies globally despite a challenging international environment marked by geopolitical tensions, trade disruptions and volatile nancial markets. Supported by robust domestic demand, sustained public investment and prudent macroeconomic policies, the economy maintained a healthy growth trajectory. Real Gross Domestic Product (GDP) is estimated to have grown by around 7.6% during the year, re ecting an improvement over the previous nancial year.

Private consumption remained the principal driver of economic activity, supported by rising disposable incomes, improving employment conditions and stable consumer sentiment. Government expenditure on infrastructure and continued policy initiatives further strengthened investment activity, while the manufacturing and services sectors recorded healthy growth. Agriculture also performed well during the year, aided by favourable monsoon conditions and improved farm output, contributing to rural demand and overall economic stability.

In ation moderated signi cantly during the nancial year and remained within the Reserve Bank of Indias target range, largely due to easing food prices and e ective monetary management. Lower in ation enhanced household purchasing power, encouraged discretionary spending and supported consumption-led growth.The stable in ationary environment also enabled improved nancial conditions for businesses and consumers alike.

Indias nancial sector continued to exhibit resilience, supported by well-capitalised banks, improved asset quality and sustained credit expansion across productive sectors. Public sector banks further strengthened their balance sheets through lower non-performing assets and higher pro tability, while credit growth remained healthy, supporting business expansion and capital formation. The countrys macroeconomic fundamentals continued to inspire investor con dence and reinforce nancial stability.

The external sector remained resilient despite persistent global uncertainties, including evolving trade policies and tari -related challenges. Growth in services exports, resilient merchandise exports and healthy foreign investment in ows supported the economy, although external risks continue to warrant close monitoring. Indias expanding digital ecosystem, increasing adoption of technology across industries and continued focus on structural reforms are expected to further enhance productivity and competitiveness.

Looking ahead, while global economic uncertainties and geopolitical developments may continue to in uence external demand, Indias strong domestic fundamentals, policy support, expanding digital economy and ongoing infrastructure investments position the economy favourably for sustainable long-term growth. These factors are expected to provide a solid foundation for continued economic expansion in the coming years.

INDUSTRY TRENDS/INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian Media and Entertainment (M&E) industry continued its growth momentum during FY 2025 26, expanding by approximately 9% to reach a market size of around Rs. 2.78 trillion. Growth was primarily driven by the continued expansion of digital media, increased advertising expenditure and strong consumer demand for live entertainment experiences.

Digital media remained the largest segment of the industry, crossing the Rs. 1 trillion revenue milestone. Digital advertising continued to outperform traditional media, supported by growing internet penetration, increasing smartphone usage, connected TV adoption, social media platforms, e-commerce advertising and the rising consumption of regional-language content. Advertisers increasingly allocated budgets towards digital platforms, re ecting evolving consumer preferences and measurable campaign outcomes.

The live events segment recorded exceptional growth, driven by large-scale concerts, sporting events, cultural festivals and experiential entertainment. The theatrical lm segment also witnessed a healthy recovery, supported by improved box-o ce collections and higher audience footfalls. Music streaming and digital subscriptions continued to expand, while digital Out-of-Home (OOH) advertising maintained steady growth through greater deployment of digital displays across urban locations.

Traditional media segments, including linear television and print, continued to face structural challenges as audiences and advertisers increasingly shifted towards digital platforms. However, television retained its wide reach, particularly in regional markets.

Technological innovation remained a key industry driver, with wider adoption of Arti cial Intelligence (AI) and Generative AI for content creation, localisation, recommendation engines and advertising optimisation. Looking ahead, sustained digital adoption, increasing demand for regional content, technological advancements and a favourable policy environment are expected to support the long-term growth of the Indian Media and Entertainment industry.

SEGMENT/ SEGMENT WISE OR PRODUCT-WISE PERFORMANCE

Sun TV Network Limited (Sun TV Network) operations predominantly relate to a single segment "Media and Entertainment".

OUTLOOK

Sun TV Network continues to maintain its leadership position in the Media and Entertainment sector through its strong portfolio of television channels and digital o erings across multiple genres, including general entertainment, movies, music, news, kids and lifestyle. With a dominant presence in the southern markets of Tamil Nadu, Kerala, Karnataka and Andhra Pradesh, the Network has also strengthened its footprint in Bangla, Marathi and Hindi language markets, enabling it to reach a wider audience.

The Companys consistent focus on high-quality content, audience engagement and diversi ed revenue streams is expected to support its long-term growth. Continued investments in digital platforms, content creation and distribution are expected to further strengthen its competitive position.

At the consolidated level, the acquisition of the SunRisers Leeds franchise (previously known as "Northern Superchargers Limited") in *The Hundred* cricket league in the United Kingdom is expected to contribute positively to revenue and pro tability. In addition, the Company anticipates improved growth from its cricket franchise and movie production and distribution businesses, which are expected to further diversify earnings and enhance shareholder value in the coming years.

FINANCE

Total Income

The Total Income for the year ended March 31, 2026, was at Rs. 4,637.70 crore as against Rs. 4,543.96 crore during the previous year ended March 31, 2025. The sustained growth and consistently higher margins are re ective of the Companys continued dominance in the broadcasting business in the Southern states an increase in digital business over the last year

Pro t Before Tax (PBT), Pro t After Tax (PAT) and Total Comprehensive Income

Pro t Before Tax for the year ended March 31, 2026 was at Rs. 1,876.24 crore as against Rs. 2,154.45 crore in the previous year. Pro t After Tax for the year ended March 31, 2026 was at Rs.1,393.52 crore as against Rs.1,654.46 crore in the previous year. Total Comprehensive Income or the year ended March 31, 2026 was at Rs.1,395.01 crore as against Rs.1,654.47 crore in the previous year.

Dividend

During the year ended March 31, 2026, the Board of Directors have declared interim dividends of Rs. 5.00 per share (100%), Rs. 3.75 per share (75%), Rs. 2.50 per share (50%) and Rs. 1.25 per share (25%) at their respective Board meetings held on August 7, 2025, November 14, 2025, February 6, 2026, and March 6, 2026 and have not recommended any Final Dividend. The dividend payout has resulted in a total dividend of 250%, i.e., Rs. 12.50 per equity share of face value of Rs. 5.00 each for the nancial year ended March 31, 2026. (Prev. Year of 300%, i.e., Rs. 15.00 per equity share of face value of Rs. 5.00 each). The outgo on account of interim dividend is Rs. 492.61 crore (previous year Rs. 591.13 crore).

Reserve and Surplus

The Reserve and Surplus of the Company as on March 31, 2026 stood at Rs. 12,122.06 Crore as against Rs. 11,219.66 crore as on March 31, 2025.

FINANCIAL POSITION

Shareholders Funds

Shareholders Funds as on March 31, 2026 was Rs. 12,319.10 crore (previous year Rs. 11,416.70 crore).

Loan funds

The Company is debt free and had no loan funds secured or unsecured as on March 31, 2026 (previous year Rs. Nil).

Assets

Net block of property, plant & equipment were at Rs. 712.58 crore, capital work in progress were at Rs. 30.51 crore and Investment properties were at Rs. 23.75 crore. The addition to property, plant & equipment for the year was Rs. 63.29 crore. The capital expenditure was funded through internal accruals. Net block of intangible assets and intangible assets under development as on March 31, 2026 were at Rs. 393.02 crore and Rs. 856.99 crore respectively

Earnings per share

The Earnings per share of face value of Rs.5.00 for the year ended March 31, 2026 is Rs. 35.36 (previous year Rs. 41.98).

DETAILS OF KEY FINANCIAL RATIOS

Details of signi cant changes (i.e. change of 25% or more as compared to the immediately previous nancial year) in key nancial ratios, along with detailed explanations therefor, including:

Debt-Equity Ratio

The Debt-Equity Ratio for the year ended March 31, 2026 is 0.01% (previous year 0.01%) and the change in the Ratio is (21.40% )

Debt Service Coverage Ratio

The Debt Service Coverage Ratio for the year ended March 31, 2026 is 20.03% (previous year 17.61%) and the change in the Ratio is 13.77%.

Return on Investment

Return on Investment for the year ended March 31, 2026 is 6.95% (Previous year 8.18%) and the change in the ratio is (15.03%)

Return on Net Worth

Return on Net Worth has declined to 11.31% for the year ended March 31, 2026 from 14.49% for the previous year.

Debtors Turnover Ratio

The Debtors Turnover Ratio for the year ended March 31, 2026 is 3.19% (previous year 3.24%) and the change in the Ratio is (1.62%).

Inventory Turnover-Not applicable

Interest Coverage Ratio

The Interest Coverage Ratio for the year ended March 31, 2026 is 189.07 (previous year 200.33) and the change in the Ratio is (5.62%).

Operating Pro t Margin (%)

The Operating Pro t Margin for the year ended March 31, 2026 is 46.50% and previous year 46.09%

Net Pro t Margin (%)

The Net Pro t Margin for the year ended March 31, 2026 is 30.05% and previous year 36.41%

OPPORTUNITIES AND THREATS

Opportunities:

The Indian Media and Entertainment (M&E) industry continues to o er signi cant growth opportunities, driven by increasing digital adoption, changing consumer preferences and continuous technological advancements. With one of the worlds largest internet user bases, growing smart phone penetration and a ordable data services, digital content consumption continues to expand across urban as well as rural markets. The increasing popularity of Connected TVs, OTT platforms and mobile streaming has created new avenues for content distribution and audience engagement.

Regional language content remains a key growth driver. Indias linguistic diversity presents substantial opportunities for broadcasters and content creators to deliver localized and culturally relevant programming. Advertisers are also increasingly leveraging digital platforms, social media and data-driven marketing strategies to engage consumers more e ectively, resulting in a continued shift of advertising expenditure towards digital media. At the same time, technological innovations, including Arti cial Intelligence (AI),Generative AI and advanced analytics, are transforming content creation, personalization and audience measurement, enabling media companies to improve operational e ciency and enhance viewer experiences.

Sun TV Network is well positioned to capitalize on these opportunities through its strong leadership in the southern markets, diversi ed channel portfolio, expanding digital presence and focus on delivering high-quality regional content. The Companys continued investments in content creation, digital platforms, movie production and distribution, together with the addition of its international cricket franchise business, are expected to support long-term growth and strengthen revenue diversi cation.

Threats:

Despite these opportunities, the industry continues to face several challenges. Intense competition from traditional broadcasters, OTT platforms and digital- rst content providers has increased pressure on audience acquisition, content investments and advertising revenues. Changing consumer preferences and evolving viewing habits require continuous innovation and timely adaptation of content strategies.

Content piracy and unauthorized distribution remain signi cant concerns, adversely a ecting monetization and returns on content investments. Evolving regulations, cybersecurity threats, and rapid tech disruptions create ongoing operational challenges for media companies. In addition, increasing costs associated with premium content acquisition, sports broadcasting rights and creative talent may impact pro tability across the industry.

For the Company, sustaining audience leadership and maintaining strong viewer engagement remain critical to long-term success. Subscription and advertising revenues, which constitute the primary sources of income, may be in uenced by competitive intensity, economic conditions and changes in advertising spending patterns. Further, the Companys performance depends on its ability to e ectively deploy capital, adopt emerging technologies, ensure uninterrupted operations, attract and retain creative talent and secure compelling content that resonates with its diverse audience base. The Company continues to monitor these risks closely and adopts appropriate strategies to mitigate their impact while pursuing sustainable growth.

RISK ANALYSIS AND MANAGEMENT

Risk management is an integral part of the Companys business strategy and governance framework. Operating in the dynamic media and entertainment industry, the Company is exposed to various strategic, operational, nancial and regulatory risks. Sustained business performance depends on the ability to consistently deliver quality content while maintaining strong relationships with viewers, advertisers and other stakeholders. The Company continuously identi es, evaluates and manages key risks through appropriate mitigation measures to support long-term growth and business resilience.

PRINCIPAL RISKS AND THEIR MITIGATION

STRATEGIC RISK

The Media and Entertainment industry is closely linked to the overall economic environment and consumer spending patterns. Changes in macroeconomic conditions, geopolitical developments, regulatory policies, in ation, interest rates, technological disruption, natural calamities and other unforeseen events may in uence advertising expenditure, subscription revenues and overall industry growth. The industry also operates within an evolving regulatory framework, where changes in licensing requirements, content regulations, foreign investment norms and distribution policies may impact business operations.

To address these risks, the Company continues to focus on strengthening its core business through high-quality content, prudent business practices and a diversi ed portfolio across television broadcasting, digital platforms, movie production and distribution, and sports franchise operations. The Companys strong presence across multiple genres, including general entertainment, movies, news, music, kids and lifestyle channels, together with its leadership in the southern markets and growing presence in other language markets, enables it to maintain a broad and loyal viewer base.

The Company has adopted a content ownership strategy by commissioning and owning a signi cant portion of its programming, thereby creating long-term value through monetization across television, digital and OTT platforms. Continuous investments in original regional-language content, audience research and technology-driven content distribution help the Company respond e ectively to changing viewer preferences. Its established brand, extensive distribution network and sustained market leadership provide signi cant competitive advantages and support pricing strength in both advertising and subscription revenues. These initiatives, together with continuous monitoring of the regulatory environment, help mitigate strategic risks and position the Company for sustainable long-term growth.

Risk Mitigation

To mitigate strategic risks from macroeconomic shifts and regulatory changes, the company leverages a diversi ed business portfolio across television, OTT, movie production, and sports franchises like Sunrisers Eastern Cape and Sunrisers Leeds. By combining full ownership of high-quality original content with continuous audience research and proactive regulatory monitoring, it maintains strong pricing power and adapts swiftly to evolving consumer preferences across global markets.

OPERATIONAL RISK

In the event of possible continued uctuation or decline in the popularity of channels of Sun TV Network, there could be an impact on both advertisement as well as subscription revenue.

Risk Mitigation

Beyond its comprehensive four-language lm library, Sun TV Network retains full rights to its recent ction content assets. This enables long-term, multi-platform monetization across both linear broadcast and OTT channels, granting the Network signi cant pricing leverage to enhance advertising and subscription revenue growth

FINANCIAL RISK

Treasury Investments Risk

The Company carries signi cant amounts of surplus cash on its balance sheet, which are invested in various securities; the value of these investments may be eroded if they are deployed in risky asset classes.

Risk Mitigation

The Company follows a conservative policy of investing, which disallows any exposure to volatile assets like equity shares or illiquid assets like real estate. The policy is de ned to preserve capital by permitting investments only into AAA rated instruments, with reasonable rates of return and allows quick liquidation by avoiding long dated securities.

Leverage Risk

A high debt component could result in an excessive interest drain.

Risk Mitigation

The company is a zero-debt company.

Receivable Risk

Delays in the collection of accounts receivable could a ect the Companys cash ow, with poor follow-up potentially leading to delinquency and write-o s.

Risk Mitigation

The company constantly monitors its debt collection and ensures that the debtors are periodically reviewed, and dues maintained at levels that do not a ect its cash ow.

LEGAL AND STATUTORY RISKS

RISK ON CONTRACTUAL LIABILITIES

The risk arising out of contracts that impose onerous responsibilities.

Risk Mitigation

The Company constantly reviews all Agreements, documents and contracts to ensure compliance with the accepted business procedures.

COMPLIANCE RISK

The risk arising out of non-compliance with statutory requirements

Risk mitigation

Sun TV Network ensures strict compliance of all statutory requirement through a well-developed internal process and is duly supported by its legal team and these processes are continuously monitored and reviewed periodically to adapt to the changing requirements.

INTERNAL CONTROL

Weak internal control can jeopardize the Companys nancial position.

Risk mitigation

The Company has in place systems and processes, commensurate with its size and nature of business so as to ensure adequate internal control while ensuring smooth conduct of operations and compliance with statutory requirements under all applicable legislations. The Company has implemented SAP ERP system, which ensures signi cant automation of processes, with su cient IT system controls in place. Independent internal audit is carried out to ensure adequacy of internal control system and adherence to policies and practices. The Audit Committee reviews the functioning of the internal audit function.

HUMAN RESOURCES

At Sun TV Network, with 1010 employees human resource is a key asset capital and an important business driver for the Companys sustained growth and pro tability. Hence, we at Sun TV Network believe that training, like all organizational development processes cannot be a function of time, but rather an ongoing process with the developmental needs and business planning processes being formalized constantly. A continuous review of the monitoring process is underway and procedures and systems are being institutionalized across the organization.

CAUTIONARY STATEMENT

This Management Discussion & Analysis Report and the Directors Report contain forward-looking statements regarding the companys vision, estimates, and anticipated performance. These statements involve inherent risks and uncertainties, and actual results may di er materially from those expressed or implied.

	On behalf of the Board of Directors
	Mahesh Kumar Rajaraman
Place: Chennai	Managing Director
Date: August 12, 2026	DIN: 05263229