ICICI Direct recommended hold rating on Dish TV with a target price of Rs 80 in its research report dated July 11, 2018.
ICICI Direct's research report on Dish TV
Dish TV reported strong performance on subscription revenue owing to (i) Price hikes across majority of the packages (ii) Lower discounts at package level (iii) Higher share of HD subscribers in net additions. The subscriber additions also picked up during the sports heavy quarter and also on festivities. Subscription revenues stood at | 1489.3 crore, which was up by 8.1% QoQ attributable to strong performance at ARPU level i.e 6.5% QoQ growth to |214 (vs our expectation of 2% QoQ growth).
We believe that perceived threat of Jio can restrict Dish’s re-rating despite its synergy led benefits. We, therefore, assign a HOLD rating with a revised target price of | 80, valuing it at 7.5x FY20E EV/EBITDA for combined entity, post synergy benefits of ~| 300 crore in FY19E and FY20E and adjusted for license fee liability of ~| 1950 crore.
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