Dish TV:: Emkay: Top Buys

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TP : Rs99
Investment Rationale
§ Leader in the DTH space with active subscriber base of 8.93million and gross subscriber base of 11.2million. We
expect it to maintain its leadership with 29% subscriber market share and 24% share in incremental net adds by
FY13E
§ We estimate subscriber addition of 3mn and ARPU of Rs154 for FY12E. Recent price hike in its recharge
packages and uptick in HD subscriber would support ARPU improvement, resulting in strong revenue growth.
§ Recent price hike on the STB for initial start-up packages would reduce SAC (subscriber acquisition cost) and
per subscriber pay back period. We estimate company to turn PAT positive by Q4FY12E
§ With Rs11.0bn of cash profit generation over the next two years and cash balance in sheet would fund the
subscriber addition for same period. We estimate Dish TV to turn FCF positive by FY13E, thereby enabling
future growth through internal accruals and de-leveraging of balance sheet.
§ We estimate 34.7% & 76.2% revenue and EBITDA CAGR over FY11-13E respectively, led by strong operating
leverage on increasing scalability of business
Valuations
§ At CMP of Rs80, the stock trades at 17.4x and 12.4 EV/EBIDTA. Premium to global peers justified given Dish
TV’s growth trajectory. We maintain ACCUMULATE rating on the stock with DCF based target price of Rs 99.
Higher than expected churn rate and slower improvement in ARPU would be the key risk to our call.

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Emkay: Top Buys and Sells