Falling rupee lowers PAT for Dish TV: Venkatesh

RC Venkatesh, CEO, Dish TV, says that the company has achieved a significant milestone with having a good cash flow of Rs 44 crore in this quarter. He further says that the depreciating rupee is adding pressure to company’s PAT numbers. He also mentions that post digitization the trend in the industry will change and it will be a game changer for the industry.

Below is the edited transcript of his interview to CNBC-TV18. Also watch the accompanying video.

Q: Your EBITDA line looks quite impressive, but net loss is higher than expected why happened to net loss figure?

A: In this quarter we have achieved a significant milestone where we have turned our free cash flow positive. Forex and depreciating rupee impacted our PAT numbers. At the operational level we had to bear the impact of depreciating rupee on costs that we incur in dollars, for example the transponder lease and the cryptography charges that we pay which is denominated in dollars. A large chunk of our bottom line is impacted by the dollar.

Q: How much subscription growth did you see this quarter and how can you extrapolate that into a trend for FY13?

A: In terms of value, in this quarter subscription grew at 3-3.5% q-o-q. Yearly, our total subscription grew by 39%. As far as extrapolating for FY13 is concerned, FY13 is going to be quite a different year, if digitization plays out as the government intended it to and therefore the extrapolation have to be layered on with the impact of digitization. If things go as per schedule, significant kicker to come in from the digitisation of the four metros in Q2 of this fiscal and that would mean that you would see a different trend line for FY13 as compared to FY12.

Q: What kind of ARPU do you think you can achieve in FY13?

A: FY13, if digitization plays out the way it is then there will be headwinds because if everyone was aggressively seeding boxes, especially cable, in an environment where everyone will be going out for aggressive acquisition of subscribers, its will be difficult for players to move up ARPU aggressively. Secondly, the 2.06% impact of service tax is a dampener on the ARPU. Controlling all these things the ARPU growth expectations for FY13 need to be tempered. I do not expect that to be very aggressive. If we are able to achieve 2-3% overall increase over the year that would be a good achievement.

Q: Last time you said that you would breakeven on the net line, by Q3 of FY13. Has anything changed? Do you think you could breakeven earlier after the numbers that you have posted?

A: Free cash flow is the metric which we follow, which is more important then the PAT. We generated Rs 44 crore in cash which is quite a significant milestone. We are hopeful to see more stability in the rupee going forward, that would make a huge difference. We are very pleased with the situation where the company is has started throwing out cash.