Startup-IPO frenzy ripple effect: Sun TV’s ad revenue breaches pre-Covid level 

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The startup and e-commerce IPO frenzy has ushered in a lot of advertising money for Sun TV Network in the July-September quarter as the South Indian media network giant made Rs 342 crore by airing ads, surpassing the pre-Covid level seen in the corresponding quarter of 2019-20.

“New-gen companies which are planning for IPOs or are sitting on IPO money like BYJU’S, Zomato, Paytm and a lot of other new e-commerce players are spending huge amounts on ads. We saw a huge traction from them, with a (total) 40 per cent ad revenue growth quarter-on-quarter. Besides, September and October have brought us record-breaking revenue for us (from ads),” said CFO VC Unnikrishnan at an earnings call on Monday.

Advertising revenue, which is the largest chunk of the company’s total revenue, grew 39.8 per cent compared to the April-June quarter and 1.4 per cent compared to July-September of 2019-20.

While FMCG accounts for 55 per cent of the company’s total ad pie, Unnikrishnan said FMCG  experienced a little bit of pressure, which was compensated by new-age firms’ good showing. He added that retail ad spends also bounced back, growing at a relative 40-50 per cent compared to what it was pre-Covid.

The industry-wise ad revenue contributors for the company are FMCG (55 per cent), e-commerce (10 per cent), retail (8 per cent), pharma (5 per cent), automobiles (4 per cent) and others (18 per cent).

As the April-June quarter was badly hit by the second wave of coronavirus infections, ad revenue growth was at (-19 per cent) compared to the previous financial year for the company at the end of the first half of the financial year. “We hope to neutralise it in the next two quarters,” said Unnikrishnan.

“We expect the festive season to prop ad revenue momentum, though Sun TV may still post 5-7 per cent lower ad revenue versus pre-Covid level in FY22 (annualised),” said Elara Capital SVP and Research Analyst Karan Taurani.

Sun TV Network’s overall revenue grew 9.6 per cent year-on-year to Rs 8,28.7 crore, and its profit after tax grew to Rs 393 crore from Rs 346 crore a year ago.

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