Dish TV India - "Subscriber addition continued in spite of price hike..." - KR Choksey

Dish TV's Q2FY13 result was in line with our expectation. The company reported net sales of Rs 534crs, a growth of 10% YoY driven by higher subscriber base and increase in ARPU. EBITDA stood at Rs 164crs, a healthy growth of 5.7% YoY. Increase in employee cost and higher other expenses dented EBITDA margins by 130bps to 30.7%.

The company reported exceptional gain of Rs 76.4crs on account of reversal of finance cost for FY12 and higher depreciation for Q1FY12. This led to increase in PAT by 272% to Rs 55crs. Although Phase I of digitization didn't have much impact on incremental new subscriber addition till H1FY13, the management has guided subscriber addition to pick up in rest of the phases of digitization. We believe Dish TV will benefit the most amongst DTH players considering its pan India presence.

Entry level base price hike will boost ARPUs going ahead. Strong revenue growth led by higher subscriber base and increase in ARPU and cost rationalization will drive EBITDA improvement in FY14E. Maintain BUY.

Source : Equity Bulls

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