Motilal Oswal has maintained neutral rating on Dish TV India
with a target of Rs 75 in its January 23, 2013 research report.
“Dish TV (DITV) enjoys a leadership position, with ~30% subscriber share in the fast-growing 6-player Indian DTH market. As of December 2012, DITV had 10.5m active DTH subscribers. DITV launched a 'lifetime free' scheme, which will enable subscribers to watch 70 free channels for five years for a recharge of INR200 every six months.”
“Dish TV's 3QFY13 EBITDA grew 15% YoY but declined 12% QoQ to INR1.38b (v/ s our estimate of INR1.5b). Revenue grew 14% YoY and 4.5% QoQ to INR5.58b. Operating cost increased 11% QoQ on higher content and commission costs. EBITDA margin declined 450bp QoQ to 24.7%. Net loss for the quarter increased 1.1x QoQ to INR449m v/s our estimate of INR256m net loss largely due to lower EBITDA and higher depreciation. Subscription revenue grew 4.5% QoQ to INR4.94b, driven by ~5% increase in net subscriber base to 10.5m and largely flat ARPU at INR160/month. Gross subscriber additions improved 74% QoQ to 0.83m on higher demand due to festive season and phase-I digitization. Monthly churn rate remained steady at ~1% per month (~0.3m subscribers churned during the quarter).”
“Phase-II digitization (official deadline of March 2013) is likely to present an opportunity to digitize 11-12m households, of which the DTH industry could garner 35-40%. EBITDA margin is likely to remain under pressure in 4QFY13 due to expected inflation in content costs post new contract with Media-Pro. We expect margins to recover from 1QFY14. We are downgrading our EBITDA estimates by 6-7%, led by our assumption of lower gross additions for FY13/14 (2.5m/3m v/s 2.8m/3.8m earlier). The stock trades at an EV of 11.8x FY14E and 9x FY15E EBITDA. Maintain Neutral with a revised one-year forward DCF-based target price of INR75,” says Motilal Oswal research report.
FIIs holding more than 30% in Indian cos
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