Dish TV - Margin dips, but long-term story intact - Edelweiss

Though Dish TV's Q3FY13 revenue was in line with our expectations, there was disappointment on the EBITDA margin front (24.7% in Q3FY13 vis-à-vis 29.2% in Q2FY13 and 26.7% in Q3FY12). The dip in margins was due to higher investments in sales and distribution infrastructure for digitisation (~INR130-140mn) and ~14.6% QoQ increase in content costs. ARPU increased marginally QoQ from INR159 to INR160.

On the positive side, Dish TV added robust 0.83mn gross subscribers (including 0.5mn net additions which has stepped up from 0.2mn in Q2FY13), incremental DTH market share of Dish TV improved by 100bps QoQ to 24% (28% share in phase 1) and churn was maintained at 1%. We continue to remain positive on Dish TV and expect it to be one of the beneficiaries of the digitisation process and the recent INR appreciation.

Maintain 'BUY'.

Source : Equity Bulls

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