Dish TV - Beats estimates; outlook positive :: HDFC Securities

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Beats estimates; outlook positive
Dish TV’s (DITV) Q3FY15 results were ahead of
estimates on account of higher than expected
revenue growth as well as cost control. Management
commentary on the business outlook is positive and
we concur with the same. We see high visibility of
growth in the near-term as well as medium–term.
Subscriber adds will continue to remain robust due to
(1) The 2015 cricket world cup, followed by (2)
consistent gains in Phase-III/IV markets, and finally,
(3) mandatory digitization of phases III/IV. We
believe there is increased visibility on ARPU growth
as well, on account of initiatives from MSOs
(following reference interconnect offer – RIO,
arrangements with a leading broadcaster, more such
deals to follow) to raise customer rates by enforcing
content packaging and billing. Dish TV has no
significant renegotiations with broadcasters till
September 2016, which lends visibility to margin
expansion as well. Further to these, Dish TV stands to
gain from regulatory initiatives on GST/ reduction in
license fees.
We assume coverage with a BUY rating and a DCFbased
TP of Rs 92. Our target price implies an
EV/EBITDA multiple of 12.3x and 9.7x in FY16 and
FY17 respectively.
 Results ahead of estimates : Dish TV’s 3QFY15 revenue
at Rs 7.1bn (+14%YoY/6% QoQ) was ahead of estimates
as ARPU as well as subscriber addition surprised
positively. During the quarter, the company reaped
benefits of package price increases that translated into
an improvement in ARPU. Dish also gained ground in
phase III/IV areas, leading to robust subscriber
addition.
 EBITDA at Rs 1.91bn (+32%YoY/18%QoQ) also
surpassed estimates as programming cost remained
under control. EBITDA margin at 26.8% improved by
350bps YoY and 260bps QoQ on account of stable
programming costs.

LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010895