Sun TV Network Ltd Management Discussions

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

Investors are cautioned that this discussion contains forward looking statements that involve risks and uncertainties including, but not limited to, risks inherent in the Companys growth strategy, acquisition plans, dependence on certain businesses, dependence on availability of qualified and trained manpower and other factors. The following discussion and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.

ECONOMIC SCENARIO

Indias economy experienced moderate growth in FY 2024 25, with GDP expanding at approximately 6.5%, reflecting a slowdown from the robust post-pandemic recovery in previous years. Despite global uncertainties, India maintained its position as one of the fastest-growing major economies. The service and manufacturing sectors remained strong contributors, while agriculture faced mixed performance due to weather variability.

A key highlight was the decline in in ation primarily due to de ation in food prices. This helped to improve purchasing power and supported consumption-led growth. On the external front, exports rose 5 5.5% to reach around $821 billion, although the trade de cit widened as import demand remained rm.

Investor sentiment improved in the latter half of the scal year, aided by S&P upgrading Indias sovereign credit rating to BBB, citing improved scal discipline and macroeconomic stability.

Challenges remained, including global trade tensions, especially from tari measures imposed by major economies. However, domestic demand resilience, controlled in ation, and policy support placed India on a stable economic trajectory going into FY 2025 26.

The Indian economy is better placed than ever to take on key challenges because of the policies adopted and implemented in the last decade. The financial sector is healthy with a strong balance sheet and continuous to broadbase its lending activities. PSU banks have become much stronger with fresh equity in flows and falling NPAs. Non-food credit growth, excluding personal loans, is growing at double-digit rates. The new found optimism stems from the resilience of the Indian economy manifest by the rebound of private consumption which has seamlessly replaced exports as the leading driver of growth. The rise in sale of high end cars and larger homes is an outcome of the consumption boom in recent quarters.

The growth outlook is better than pre-pandemic years and the Indian economy is prepared to grow at its potential in the medium term. Digitally enabled businesses ranging from food ordering to cab hailing to buying motor insurance have made significant inroads into markets that never existed till a few years ago.

INDUSTRY TRENDS/INDUSTRY STRUCTURE AND DEVELOPMENTS

In FY 2024 25, Indias media and entertainment (M&E) industry witnessed moderate growth of 3.3%, reaching a market size of approximately Rs. 2.5 trillion and contributing 0.73% to the national GDP. The industry saw significant structural shifts, primarily driven by digital transformation. For the first time, digital media overtook television to become the largest segment, contributing 32% of overall revenues. The surge in a ordable internet access, mobile usage, and vernacular content consumption fuelled this digital expansion.

Advertising revenues grew by 8.1%, supported largely by digital advertising, which made up 55% of total ad spends. Short-form video, in uencer marketing, and e-commerce advertising were major growth drivers. The live events sector also bounced back strongly, expanding by over 15%, crossing the Rs.10,000 crore mark, as music concerts, festivals, and sports events drew large audiences. Similarly, digital Out-of-Home (OOH) advertising grew by 78%, showcasing innovation in location-based engagement.

Traditional segments, however, continued to decline. Pay-TV lost 6 7 million subscribers, while print and lm saw revenue contraction. Theatrical lm revenues fell by 5%. Music revenues stagnated, though paid subscriptions rose to 10.5 million.

Technological innovation gained ground with increased use of Generative AI in content creation, dubbing, and user personalization. Regulatory focus increased, including new anti-piracy initiatives from the I&B Ministry. The sectors outlook remains positive, with digital- first strategies, immersive technologies, and vernacular content expected to drive the next phase of growth in FY 2025 26.

SEGMENT/ SEGMENT WISE OR PRODUCT-WISE PERFORMANCE

Sun Networks operations predominantly relate to a single segment "Media and Entertainment".

OUTLOOK

Sun Network delivers a steady flow of highly popular programs and a dominant share of audience viewership which has given the network tremendous pricing power vis-a-vis competitors. Sun Network continues to have its presence across genres like general entertainment, movies, music, news, kids, life and while having a considerable market share in the four southern states of India (Tamil Nadu, Kerala, Karnataka and Andhra Pradesh), has expanded to Bangla, Marathi and Hindi Languages in the recent years. In the coming years revenue from the Cricket Franchise and movie production / distribution expected to increase substantially.

Consequent to the acquisition of the franchise in "The Hundred" Cricket league at United Kingdom on a consolidated level the Company expects incremental Revenue & Profit from the current financial year.

FINANCE

Total Income

The Total Income for the year ended March 31, 2025, at Rs. 4,543.96 crore as against Rs. 4,630.19 crore during the previous year ended March 31, 2024. The sustained growth and consistent higher margins are reflective of the Companys continued dominance in broadcasting business in the Southern states and increase in digital business over last year

Profit before tax (PBT), Profit after tax (PAT) and Total comprehensive income

Profit Before Tax was at Rs. 2,154.45 crore as against Rs. 2,548.54 crore in the previous year. Profit After Tax was at Rs. 1,654.46 crore as against Rs. 1,875.15 crore in the previous year. Total Comprehensive income was at Rs. 1,654.47 crore as against Rs. 1,875.30 crore in the previous year.

Dividend

During the year ended March 31, 2025, the Board of Directors have declared interim dividends of Rs. 5.00 per share (100%), Rs. 5.00 per share (100%), Rs. 2.50 per share (50%) and Rs. 2.50 per share (50%) at their respective Board meetings held on August 9, 2024, November 13, 2024, February 7, 2025, and March 7, 2025 and have not recommended any Final Dividend. The dividend payout has resulted in a total dividend of 300%, i.e., Rs. 15.00 per equity share of face value of Rs. 5.00 each for the financial year ended March 31, 2025. (Prev. Year of 335%, i.e., Rs. 16.75 per equity share of face value of Rs. 5.00 each). The outgo on account of interim dividend is Rs. 591.13 crore (previous year Rs. 660.09 crore).

Reserve and Surplus

The Reserve and Surplus of the Company as on March 31, 2025 stood at Rs. 11,219.66 Crore as against Rs. 10,156.31 crore as on March 31, 2024.

FINANCIAL POSITION

Shareholders Funds

Shareholders Funds as on March 31, 2025 was Rs. 11,416.70 crore (previous year Rs. 10,353.35 crore).

Loan funds

The Company is debt free and had no loan funds secured or unsecured as on March 31, 2025 (previous year Rs. Nil).

Assets

Net block of property, plant & equipment were at Rs. 748.67 crore, capital work in progress were at Rs. 17.26 crore and Investment properties were at Rs. 25.64 crore. The addition to property, plant & equipment for the year was Rs. 33.42 crores. The capital expenditure was funded through internal accruals. Net block of intangible assets and intangible assets under development as on March 31, 2025 were at Rs. 613.65 crore and Rs. 326.94 crore respectively

RATIOS

Earnings per share

The Earnings per share of face value of Rs.5.00 for the year ended March 31, 2025 is Rs. 41.98 (previous year Rs. 47.58).

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

Debt-Equity Ratio

The Debt-Equity Ratio for the year ended March 31, 2025 is 0.01 (previous year 0.00) and the change in the Ratio is 952.05%

The increase in Debt-Equity Ratio is due to higher debt (i.e. lease liabilities) due to lease renewals during the year.

Debt Service Coverage Ratio

The Debt Service Coverage Ratio for the year ended March 31, 2025 is 17.61 (previous year 202.26) and the change in the Ratio is 91.29%.

The decrease in Debt Service Coverage ratio is due to increase in debt (i.e. Lease liabilities) due to lease renewals and decrease in earnings during the year.

Return on Investment

Quoted Ratio for the year ended March 31.2025 is 8.29 (Previous year 7.52) and the change in the ratio is is 10.20%

Unquoted Ratio for the year ended March 31, 2025 is 7.98% (previous year 7.32%) and the change in the Ratio is 8.97%

The increase in Quoted return on investment ratio is due to higher returns from the investments during the year. The increase in unquoted return on investment ratio is due to higher returns from the investments during the year.

Return on Net Worth

Return on Net Worth has declined to 14.49 % for the year ended March 31, 2025 from 18.11% for the previous year.

OPPORTUNITIES AND THREATS

Opportunities:

The media and entertainment (M&E) industry in India is poised for substantial growth, driven by rapid digital adoption, a young and diverse population, and increasing consumer demand for localized and global content. With one of the worlds largest internet user bases over 800 million users India offers immense opportunities for digital media platfofirms, OTT (over-the-top) services, and streaming content providers. As data costs continue to fall and smartphone penetration rises, rural and semi-urban areas are becoming significant new markets for digital consumption.

One of the key opportunities lies in the regional content market. Indias linguistic and cultural diversity creates demand for content in multiple regional languages, providing scope for regional OTT platfofirms and local content creators to thrive. This trend is also being recognized by global players who are increasingly investing in India-specific productions.

Advertising is also evolving, with digital advertising surpassing traditional formats. Brands are shifting budgets to online platfofirms, in uencer marketing, and programmatic advertising, creating lucrative opportunities for digital media firms.

Indias lm industry, one of the largest in the world, continues to evolve with global collaborations, cross-platform distribution, and increased international recognition. Combined with a strong music industry and live entertainment sector, the potential for innovation and growth is significant.

Overall, Indias M&E industry stands at a transformative juncture. With supportive government initiatives, technological advancements, and rising consumer engagement, it offers abundant opportunities for both domestic and international players to expand, innovate, and shape the future of entertainment.

Threats

Despite its rapid growth, the media and entertainment (M&E) industry in India faces several significant threats that could hinder its progress. The primary challenges are content piracy, regulatory uncertainty, monetization issues, and cybersecurity threats. The ease of access to pirated content online undermines the value of original work and discourages investment in high-quality production. Certain threats applicable to us are summarized below:

Our ability to cater to viewer preferences and maintaining high audience share contributes to our commercial success.

This depends on various external factors

The Subscription and Advertising income being the major source of Sun TV Networks revenue could see a shift dueto a variety of factors including intense competition.

Technological failures could adversely affect our business.

The return on capital employed depends on how effectively we deploy and manage our funds.

Our ability to acquire desired programming and artistic talent are largely dependent on competition and increasingprices.

RISK ANALYSIS AND MANAGEMENT

Risk is an inherent feature of any business activity, more so when the dependence is on the consistency on the deliverables of the Company and linked to the sustained support from the viewers and advertisers community at large. Like every organization, our business is also impacted by a number of factors. Given below is an overview of some of the major risks affecting any business and Suns position vis-a-vis these risks.

PRINCIPAL RISKS AND THEIR MITIGATION STRATEGIC RISK

The performance and growth of media industry are dependent on the health of the Indian economy and in particular the economies of the regional markets it serves. These economies could be adversely affected by various factors, such as political and regulatory action including adverse changes in liberalization policies, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, commodity and energy prices and various other factors.

The Indian media industry has consistently faced regulatory challenges, including issues related to licensing, investment limits, channel distribution, and ownership restrictions. Despite these hurdles, Sun TV Network has delivered strong performance. However, potential regulatory changes continue to pose risks. Leveraging its long-established leadership, the company has strengthened its position through a focus on high-quality content. Over time, Sun TV has shifted from merely selling telecast slots to commissioning its own programs, allowing it to retain content ownership and monetize across both traditional linear TV and OTT platfofirms. By offering a wide range of predominantly ction content across seven languages, along with non- ction programming, Sun TV Network has secured a significant share of viewership. This strong audience base gives the network substantial pricing power compared to its competitors. With South India being the largest producer of lms annually and having a strong cinema-loving audience, Sun TV is well-positioned to tap into this market.

Risk Mitigation

By crossing the borders of the Southern States in the recent years and adding Bangla, Marathi and Hindi Languages, the Company has been able to explore newer horizons and its stabilizing and establishing its presence in the newer areas.

OPERATIONAL RISK

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

Risk Mitigation

Apart from the considerable size of the movie library across the four languages, Sun Network now also owns most of the ction content created in recent years, that can be monetised time and again both on the linear and OTT Platfofirms. This ability also gives Sun Network significant pricing power to enhance revenues from the advertisement and subscription markets.

FINANCIAL RISK

Treasury Investments Risk

The Company carries significant 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 defined 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 affect the Companys cash flow, 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 affect its cash flow.

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 failure 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 financial 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 significant automation of processes, with sufficient 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 Network, with 932 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 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

Statements in this Management Discussion & Analysis Report and Report of the Directors to the Shareholders describing in the companys objective, projections, estimates and expectations may constitute "Forward looking statement" within the meaning of applicable laws & regulations. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements.

	On behalf of the Board of Directors
	Mahesh Kumar Rajaraman
Place: Chennai	Managing Director
Date: August 7, 2025	DIN: 05263229