Don't worry about Dish TV subscriber add but ARPUs look weak

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26 Aug, 2025 12:21

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Moneycontrol Bureau

Investors of Dish TV seem to be not very bothered about its weak subscriber additions in December quarter. Shares of the direct-to-home (DTH) company rose 6 percent intraday on Thursday. Most analysts are also bullish on the stock stating that weak net additions in Q3 was due to change in management and lack of availability of competing product.

Dish TV's net subscription additions of 0.32 million were the lowest in six quarters whereas DTH/cable competitors saw acceleration in subscriber additions in third quarter. However, the management continues to guide 1.5 million net subcription additions for FY16.

Average revenue per user (ARPU) in Q3 was at Rs 172 from Rs 171 on a sequential basis. During the period, subscription revenue was up 4 percent at Rs 711.1 crore against Rs 682 crore (QoQ).According to JP Morgan, a large part of new addition are in the low ARPU segments in tier 3/4 markets, which may put pressure on ARPU levels in the near term. The company although noted that the margins on these low ARPU products are not inferior to overall business given lower content cost payouts. Further, increasing share of HD should help offset the impact on overall reported ARPU, feels JP Morgan.JP Morgan has an overweight rating with a target price of Rs 117 per share. It says that Dish TV has shown strong operating leverage on programming costs and is likely to sustain over the next few quarters. "The company has now tweaked package offerings which has seen good response and it is gaining back the market share. The company is confident in achieving net adds of 0.5 million in Q4 on new product launch and upcoming cricket season. This should help it reach its full year target of 1.5 million," it adds.

Motilal Oswal has a buy rating with a target price of Rs 130 per share, expecting a strong 33 percent EBTDA CAGR over FY15-18—led by 10 percent net subs CAGR, 4 percent ARPU CAGR and EBITDA margin expansion. However, it has marginally cut revenue/EBITDA estimates by 0.5-2.5 percent over FY15-18 to factor in lower net adds than earlier expected.

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Nasrin Sultana

Special Correspondent|Moneycontrol.com

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What impressed analysts was Dish TV paring debts. The DTH pruned its debt by Rs 300 crore, with current net debt at around Rs 561 crore. Free cash flow for the quarter stood at Rs 129.6 crore. Its Q3 net profit was at Rs 68.5 crore in Q3FY16 versus loss of Rs 2.6 crore in year-ago period. Total income, during the period, rose 12 percent to Rs 771.5 crore from Rs 690 crore in corresponding quarter last fiscal.

Meanwhile, Goldman Sachs has a sell rating with a reduced target price of Rs 76 per share. It has also cut subscriber adds for FY16 and slashed ARPU growth on concerns that  ARPU is likely to remain under pressure with digitization in rural areas and increased uptake of lower price packs.

At 11:39 hrs Dish TV India was quoting at Rs 81.10, up Rs 4, or 5.19 percent on the BSE.

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