Dish TV - Management meeting notes—seeking profitable growth - Kotak

Dish TV reiterated its focus on profitable growth and de-emphasized chasing subs (notably low-value subs) given (1) the robust scale (10.7 mn paying subs) and (2) poor churn experience with low-value subs. Other discussion points were: (1) 150-200 bps margin expansion in FY2014, led by relatively stable cost structure, (2) FCF expectation of ~Rs2 bn in FY2014 given reduced capex (large STB inventory), (3) un-hedged US$-debt exposure of ~US$180 mn but likely decline to ~US$100 mn by FY2014, (4) moderate impact of TRAI's standard tariff order for STBs and (5) continued modest traction in HD subs despite ad campaign/maximum HD channels.

We retain our ADD rating with 12-month forward FV of Rs75; ~10X FY2014E fair-accounting EBITDA valuation.

Source : Equity Bulls

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