Accumulate Dish TV India; target of Rs 73: Emkay

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Accumulate Dish TV India; target of Rs 73: Emkay

Emkay Global Financial Services is bullish on Dish TV India and has recommended accumulate rating on the stock with a target of Rs 73 in its January 19, 2012 research report.

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Emkay Global Financial Services is bullish on Dish TV India and has recommended accumulate rating on the stock with a target of Rs 73 in its January 19, 2012 research report.

"Dish TV standalone performance was below our and street expectations. Sequentially flat ARPU and reduction lease rental revenue led to lower than expected revenue growth. Subscription revenue was at Rs4.2bn (our est. of Rs4.4bn) up 3.2% qoq. The management has indicated a reversal of Rs140mn commissions paid in advance to dealers in last quarter but it has reversed Rs110mn. After adjusting for reversals, dealer commission seems to have increased as similar subs added in Q1FY13 with commission outgo of Rs326mn v/s Rs368mn (adj. for reversal). EBITDA of Rs1.2bn was lower than our estimate of Rs1.4bn with EBITDA margin at 24.5% declined 77bps qoq. Total loss for the quarter stood at Rs429mn which includes forex loss of Rs156mn, the company has also capitalized Rs400mn forex loss. Adj. loss for the quarter was at Rs 274mn v/s Rs181mn in Q2FY12."

"Dish TV added 0.74mn subscriber v/s our est. of 0.8mn. ARPU during the quarter was flat sequentially at Rs152 and HD ARPU was at Rs400. SAC during the quarter declined to Rs2124 v/s 2232 in Q2FY12. The major concern was seen as significant increase in monthly churn rate to 1.3% v/s 1.1% in Q2FY12. Management has revised its subscriber addition guidance to 2.6-2.7mn for FY12E (from 3.0mn-3.5mn), subsequently we have revised our number to 2.7mn v/s 2.9mn earlier. Exit ARPU guidance has also been revised to Rs155 from Rs165 earlier."

"We have revised our target price downward led by lower subscriber addition, cut in ARPU estimates and re-aligning estimates with higher exchange rate (Rs/USD) at Rs49.5/USD v/s Rs46/USD for FY13E. Maintain ACCUMULATE on the stock with revised target price of Rs73 (earlier Rs96). At CMP of Rs61 stock trades at 15.5x /11.3x EV/EBITDA of FY12E / FY13E, respectively," says Emkay Global Financial Services research report.

Non-Institutions holding more than 90% in Indian cos

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