Dish TV (DITV, INR 59, Buy) Q2FY11 review: Edelweiss

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Dish TV (DITV, INR 59, Buy)
· Dish TV’s Q2FY11 revenue stood at INR 3,261 mn (against INR 3,241 mn estimate), a
26.7% Y-o-Y growth. The company added 0.76 mn subscribers during the quarter. As on
September 30, 2010, the gross subscriber base stood at 8.3 mn and the net subscriber
base was 6.8 mn. ARPU per month, however, remained flat at INR 139 Q -o-Q.
· EBITDA for Q2FY11, at INR 498 mn, was ahead of our estimate of INR 375 mn. EBITDA
margins expanded sharply from 10.6% in Q1FY11 to 15.3% in Q2FY11. Content cost as a
percentage of subscription revenue dropped to an all time low of 39%. Selling and
distribution expense as a percentage of sales declined 160bps Q-o-Q. Ssubscriber
acquisition cost (SAC) reduced to INR 2,083 in Q2FY11 from INR 2,147 in the previous
quarter.
· PAT losses reduce d to INR 452 mn against our estimate of INR 642 mn (INR 632 mn in
Q1FY11).
· Dish TV has taken an enabling resolution to raise USD 200 mn through issuance of equity
shares or other equity linked instruments to support its future growth initiatives.