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Dish TV India Ltd
Key concerns abating
Having met with management today at our India Investor Conference 2012 in
Mumbai, these are some of our takeaways...
Churn likely to trend down
Post an increase in churn to 1.6% (monthly) in 3Q, it has fallen to 1.1% for the
month of January. Management highlighted it has taken measures to control
subscribers in pre churn (inactive for 0-120 days) and expects churn to reduce
further in 1Q.
ARPU expansion likely
Reiterated guidance of achieving Rs155-156 ARPU for 4Q led by price hikes
effected in November. Structurally it believes ARPUs likely to trend up due to
implementation of cable TV digitalization across the country.
Operating leverage to continue
Expect 13-15% increase in content cost during FY13E. Margin expansion story
likely sustainable. Forecast over 500 bps EBITDA margins expansion during
FY12-14E
FCF turn around on track
Expects cash flow to turn positive FY13. Reiterated that current subscriber base
should be able to fund gross sub addition of 2.6-2.7mn p.a. Stock trades at 11x
EV/EBITDA FY13E at lower end of trading band of 11-18x ,we regard this as
attractive. Retain Buy with PO of Rs90.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Dish TV India Ltd
Key concerns abating
Having met with management today at our India Investor Conference 2012 in
Mumbai, these are some of our takeaways...
Churn likely to trend down
Post an increase in churn to 1.6% (monthly) in 3Q, it has fallen to 1.1% for the
month of January. Management highlighted it has taken measures to control
subscribers in pre churn (inactive for 0-120 days) and expects churn to reduce
further in 1Q.
ARPU expansion likely
Reiterated guidance of achieving Rs155-156 ARPU for 4Q led by price hikes
effected in November. Structurally it believes ARPUs likely to trend up due to
implementation of cable TV digitalization across the country.
Operating leverage to continue
Expect 13-15% increase in content cost during FY13E. Margin expansion story
likely sustainable. Forecast over 500 bps EBITDA margins expansion during
FY12-14E
FCF turn around on track
Expects cash flow to turn positive FY13. Reiterated that current subscriber base
should be able to fund gross sub addition of 2.6-2.7mn p.a. Stock trades at 11x
EV/EBITDA FY13E at lower end of trading band of 11-18x ,we regard this as
attractive. Retain Buy with PO of Rs90.
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