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H i g h c h u r n r a t e – A m a j o r c o n c e r n…
Dish TV reported its Q3FY12 results, which were lower than our estimates
on the topline and EBITDA front. The topline stood at | 490.5 crore
against our expectation of | 508.3 crore primarily on the back of lower
than expected ARPU. The ARPU stood flat at | 152 against our
expectation of | 154. The topline grew by 1.7% QoQ and 31.4% YoY.
EBITDA disappointed at | 120.2 crore vs. our estimate of | 155.9 crore as
pre booking of ~ | 15 crore of commission in Q2FY12 did not help the
commission cost in this quarter as expected since the company wrote off
~ | 9.0 crore on account of churned subscribers. The EBITDA margin for
the quarter stood at 24.5%, which represents a contraction of 77 bps
QoQ. On the PAT front, the company reported a less-than-expected
number on account of disappointing operational performance and forex
losses of | 15.6 crore on foreign debt. The company reported a loss of |
43.0 crore against a loss of | 48.6 crore in Q2FY11.
Highlights of quarter
The subscriber addition for the quarter stood at 0.7 million, down from
1.1 million in Q3FY11. Though the subscriber addition was good in
October, backed by the festive season, it slowed down in the subsequent
months of the quarter on account of a price hike taken for an entry level
customer and a sluggish macro environment causing consumers to cut
down on their discretionary spending. The ARPU remained flat at | 152 in
Q3FY12. The subscriber acquisition cost, however, decreased from
| 2232 to | 2124 in Q3FY12 owing to a price hike taken in November.
V a l u a t i o n
Based on a lower subscriber addition outlook and a high churn rate, we
have revised our EPS estimates for FY12 and FY13 from | -0.5 and | 0.7
to | -1.4 and | 0.2, respectively. Assuming revenue CAGR of 16.7% over
FY11E–20E and terminal growth of 4.5% thereon, we have arrived at a
target price of | 71/share implying an upside of 17%. We maintain our
BUY rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
H i g h c h u r n r a t e – A m a j o r c o n c e r n…
Dish TV reported its Q3FY12 results, which were lower than our estimates
on the topline and EBITDA front. The topline stood at | 490.5 crore
against our expectation of | 508.3 crore primarily on the back of lower
than expected ARPU. The ARPU stood flat at | 152 against our
expectation of | 154. The topline grew by 1.7% QoQ and 31.4% YoY.
EBITDA disappointed at | 120.2 crore vs. our estimate of | 155.9 crore as
pre booking of ~ | 15 crore of commission in Q2FY12 did not help the
commission cost in this quarter as expected since the company wrote off
~ | 9.0 crore on account of churned subscribers. The EBITDA margin for
the quarter stood at 24.5%, which represents a contraction of 77 bps
QoQ. On the PAT front, the company reported a less-than-expected
number on account of disappointing operational performance and forex
losses of | 15.6 crore on foreign debt. The company reported a loss of |
43.0 crore against a loss of | 48.6 crore in Q2FY11.
Highlights of quarter
The subscriber addition for the quarter stood at 0.7 million, down from
1.1 million in Q3FY11. Though the subscriber addition was good in
October, backed by the festive season, it slowed down in the subsequent
months of the quarter on account of a price hike taken for an entry level
customer and a sluggish macro environment causing consumers to cut
down on their discretionary spending. The ARPU remained flat at | 152 in
Q3FY12. The subscriber acquisition cost, however, decreased from
| 2232 to | 2124 in Q3FY12 owing to a price hike taken in November.
V a l u a t i o n
Based on a lower subscriber addition outlook and a high churn rate, we
have revised our EPS estimates for FY12 and FY13 from | -0.5 and | 0.7
to | -1.4 and | 0.2, respectively. Assuming revenue CAGR of 16.7% over
FY11E–20E and terminal growth of 4.5% thereon, we have arrived at a
target price of | 71/share implying an upside of 17%. We maintain our
BUY rating on the stock.
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