Sun TV stock rallies amid stellar box office performance of Rajinikanth's 'Jailer'

The superhit success of Tamil film ‘Jailer’, starring Rajinikanth, has helped drive up the stock prices of Chennai-headquartered media giant Sun TV Network Ltd, the parent of the film’s producer Sun Pictures. This encouraging stock performance comes days after after several years of lacklustre performance on the bourses, according to analysts tracking the firm.

The Sun TV stock closed at Rs 613 on BSE on Wednesday. This was 11.4% higher than the Rs 550 it closed at on August 10 – the day the film released, and 40% higher compared to the Rs 437 it ended at on June 30.

“Rajinikanth’s 'Jailer', produced by Sun Pictures, is having a phenomenal run, smashing box office records—which shall benefit Sun TV Network’s Q2FY24 numbers,” said Abneesh Roy, Executive Director (Research), Nuvama Institutional Equities, in an investor note on Wednesday.

The film has collected Rs 600 crore-plus worldwide (including net domestic box office of Rs 320 crore). “Moreover, it continues to have a great run at the cinemas even in its third week. It made Rs 450 crore in its first week and Rs 124 crore in its second week. The film is likely only the second Tamil film after 2.0, Rajinikanth’s 2018 release, to achieve this feat.”

The film, originally made in Tamil and dubbed into Hindi, Kannada and Telugu, was released on August 10. Sun Pictures is the producer of the film. It also holds its television, satellite and audio rights. While it is a given that the regional languages versions of the film will premiere digitally on Sun’s own OTT platform Sun NXT, Netflix has reportedly bagged the Hindi rights for an estimated Rs 100 crore.

Roy, however, pointed out that Kalanithi Maran-owned Sun also needs to ramp up its presence in the OTT space. “Presently, it is recycling linear and movie content into OTT. It needs be more aggressive in creating originals and obtaining movie rights for its OTT platform, apart from marketing, in order to benefit from the fast-expanding digital-media segment.”

In early August 2023, the broadcasting and TV company which reported a 10.38% increase in quarterly revenue of Rs 1,317.78 crore for the April-June quarter of 2023. Its profit after tax rose 18.53% to Rs 582.80 crore during the period.

“Sun TV saw a sharp jump from IPL in Q1FY24 revenues and EBITDA. Income from IPL stood at Rs 513 crore with a corresponding cost of Rs 228 crore. In the coming years, we see revenue contribution from the cricket franchise rising substantially, further supported by incremental revenues from movie distribution,” added Roy’s note.