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Capital Allocation Trends At Sun TV Network (NSE:SUNTV) Aren't Ideal

Simply Wall St · 01/01 00:14

To find a multi-bagger stock, what are the underlying trends we should look for in a business? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. However, after briefly looking over the numbers, we don't think Sun TV Network (NSE:SUNTV) has the makings of a multi-bagger going forward, but let's have a look at why that may be.

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Understanding Return On Capital Employed (ROCE)

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Sun TV Network, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.13 = ₹16b ÷ (₹134b - ₹9.4b) (Based on the trailing twelve months to September 2025).

Thus, Sun TV Network has an ROCE of 13%. On its own, that's a standard return, however it's much better than the 8.8% generated by the Media industry.

See our latest analysis for Sun TV Network

roce
NSEI:SUNTV Return on Capital Employed January 1st 2026

In the above chart we have measured Sun TV Network's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Sun TV Network for free.

What Can We Tell From Sun TV Network's ROCE Trend?

When we looked at the ROCE trend at Sun TV Network, we didn't gain much confidence. Around five years ago the returns on capital were 21%, but since then they've fallen to 13%. Meanwhile, the business is utilizing more capital but this hasn't moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. It may take some time before the company starts to see any change in earnings from these investments.

The Bottom Line On Sun TV Network's ROCE

To conclude, we've found that Sun TV Network is reinvesting in the business, but returns have been falling. And investors may be recognizing these trends since the stock has only returned a total of 38% to shareholders over the last five years. So if you're looking for a multi-bagger, the underlying trends indicate you may have better chances elsewhere.

One final note, you should learn about the 2 warning signs we've spotted with Sun TV Network (including 1 which is concerning) .

While Sun TV Network may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.