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Dish TV
Overweight
DSTV.BO, DITV IN
Strong sub additions and ARPU expansion continue
DITV announced strong 3QFY11 results with revenue growth of 34% YoY
and strongest ever EBITDA margin of 17.9%. Management remains
bullish on 4Q and reiterated its guidance to achieve PAT breakeven by Q2
FY12E. We remain OW with a Sep-11 TP of Rs79.
• Strong subscriber growth: DITV added 1.1MM new subscribers in Q3,
taking YTD additions to 2.5MM. Management indicated that additions
for 4Q should further accelerate with the Cricket World Cup
commencing in Feb-11. Management sounded confident on FY12E
subscriber additions (expects FY12E additions similar to FY11E) on the
back of IPL in 1Q, followed by six months of other sports events.
• ARPUs to rise further: DITV has withdrawn its base 'silver pack' in
October and has announced price hikes for its two most popular base
packs in November. This has resulted in improved net ARPU for 3Q to
Rs142/month from Rs139/month in 2Q. Management indicated that
price hikes at the base have encouraged customer migration to premium
packs as the premium to base pack differential narrows; this should
further aid ARPU improvement. Management reiterated their earlier
guidance of exiting FY11 with an ARPU of Rs155/month.
• New transponder to increase capacity: During 3Q, DITV expanded its
transponder capacity from 432MHz to 648MHz on Asiasat, enabling it
to increase standard channel capacity to over 320 and HD capacity to
over 30. Management indicated that additional channels and higher HD
capacity would provide DITV with significant competitive advantage
over peers.
• Key 3Q highlights: 1) 3Q revenues +34% YoY, driven by strong sub
additions and higher ARPUs. 2) EBITDA margin expansion of 260bps
YoY on the back of reduced programming costs. 3) Interest costs +104%
YoY mainly due to one-time expense paid to banks to acquire additional
LCs. 4) Sub acquisition cost up Rs59 QoQ on higher selling &
distribution costs and increase in box subsidies
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Dish TV
Overweight
DSTV.BO, DITV IN
Strong sub additions and ARPU expansion continue
DITV announced strong 3QFY11 results with revenue growth of 34% YoY
and strongest ever EBITDA margin of 17.9%. Management remains
bullish on 4Q and reiterated its guidance to achieve PAT breakeven by Q2
FY12E. We remain OW with a Sep-11 TP of Rs79.
• Strong subscriber growth: DITV added 1.1MM new subscribers in Q3,
taking YTD additions to 2.5MM. Management indicated that additions
for 4Q should further accelerate with the Cricket World Cup
commencing in Feb-11. Management sounded confident on FY12E
subscriber additions (expects FY12E additions similar to FY11E) on the
back of IPL in 1Q, followed by six months of other sports events.
October and has announced price hikes for its two most popular base
packs in November. This has resulted in improved net ARPU for 3Q to
Rs142/month from Rs139/month in 2Q. Management indicated that
price hikes at the base have encouraged customer migration to premium
packs as the premium to base pack differential narrows; this should
further aid ARPU improvement. Management reiterated their earlier
guidance of exiting FY11 with an ARPU of Rs155/month.
• New transponder to increase capacity: During 3Q, DITV expanded its
transponder capacity from 432MHz to 648MHz on Asiasat, enabling it
to increase standard channel capacity to over 320 and HD capacity to
over 30. Management indicated that additional channels and higher HD
capacity would provide DITV with significant competitive advantage
over peers.
• Key 3Q highlights: 1) 3Q revenues +34% YoY, driven by strong sub
additions and higher ARPUs. 2) EBITDA margin expansion of 260bps
YoY on the back of reduced programming costs. 3) Interest costs +104%
YoY mainly due to one-time expense paid to banks to acquire additional
LCs. 4) Sub acquisition cost up Rs59 QoQ on higher selling &
distribution costs and increase in box subsidies
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