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Dish TV Overweight
DSTV.BO, DITV IN
Q1FY12: Yet another strong quarter; On track to
achieve FY guidance
DITV reported 51% YoY growth in Q1 revenues with strong EBITDA margins
at 24.4%. Management reiterated its guidance of new subscriber additions of
3.0-3.5MM in FY12 and PAT breakeven over next couple of quarters. Remain
OW with Mar-12 TP of Rs100.
Strong performance continues. DITV added 0.73MM subscribers in 1Q
(following 1MM subscribers added in 4QFY11) with incremental market
share of 25%. ARPUs remained stable at Rs150. Subscriber acquisition
costs declined 4% QoQ to Rs2,058/sub. Programming and content costs
increased 22% QoQ due to annual hikes in fixed content contracts. These
should stabilise going forward and management guided to 10%-12%
increase in FY12 content costs.
Management focusing on improving realisations. Management indicated
that they are looking to improve ARPUs through 1) migrating customers
from lower base packs improving pack mix, 2) augumenting HD offering to
encourage higher activations (DITV is adding HD channels to its offering
despite decline in HD activations in last Q) and 3) price hikes across packs.
Further, management noted that recent price hikes for its set-top-boxes and
reduced trial periods for new subscribers have been received well and
competition has followed suit.
Q1FY12 result highlights. Revenues up 51% YoY driven by subscriber
addtions (3.7MM added over 1QFY11) and 8% YoY improvement in
ARPU. EBITDA margins improved to 24.4% (from 10.6% in Q1FY11,
20.9% in Q4FY11) on operating leverage.
Maintain guidance, improving FCF position. Management reiterated its
guidance of new subscriber additions of 3.0-3.5MM in FY12 and PAT break
even over the next couple of quarters. Management noted that improving
profitability should result in enhancing FCF position. We expect Rs2.5B free
cash generation in FY12E and Rs6.6B in FY13E (vs cash burn of Rs3.2B in
FY11). Retain OW and PT of Rs100 based on 15x FY13E EV/EBITDA.
Key risks include increasing competition pressuring pricing, adverse
regulatory changes, and content cost re-negotiation.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Dish TV Overweight
DSTV.BO, DITV IN
Q1FY12: Yet another strong quarter; On track to
achieve FY guidance
DITV reported 51% YoY growth in Q1 revenues with strong EBITDA margins
at 24.4%. Management reiterated its guidance of new subscriber additions of
3.0-3.5MM in FY12 and PAT breakeven over next couple of quarters. Remain
OW with Mar-12 TP of Rs100.
Strong performance continues. DITV added 0.73MM subscribers in 1Q
(following 1MM subscribers added in 4QFY11) with incremental market
share of 25%. ARPUs remained stable at Rs150. Subscriber acquisition
costs declined 4% QoQ to Rs2,058/sub. Programming and content costs
increased 22% QoQ due to annual hikes in fixed content contracts. These
should stabilise going forward and management guided to 10%-12%
increase in FY12 content costs.
Management focusing on improving realisations. Management indicated
that they are looking to improve ARPUs through 1) migrating customers
from lower base packs improving pack mix, 2) augumenting HD offering to
encourage higher activations (DITV is adding HD channels to its offering
despite decline in HD activations in last Q) and 3) price hikes across packs.
Further, management noted that recent price hikes for its set-top-boxes and
reduced trial periods for new subscribers have been received well and
competition has followed suit.
Q1FY12 result highlights. Revenues up 51% YoY driven by subscriber
addtions (3.7MM added over 1QFY11) and 8% YoY improvement in
ARPU. EBITDA margins improved to 24.4% (from 10.6% in Q1FY11,
20.9% in Q4FY11) on operating leverage.
Maintain guidance, improving FCF position. Management reiterated its
guidance of new subscriber additions of 3.0-3.5MM in FY12 and PAT break
even over the next couple of quarters. Management noted that improving
profitability should result in enhancing FCF position. We expect Rs2.5B free
cash generation in FY12E and Rs6.6B in FY13E (vs cash burn of Rs3.2B in
FY11). Retain OW and PT of Rs100 based on 15x FY13E EV/EBITDA.
Key risks include increasing competition pressuring pricing, adverse
regulatory changes, and content cost re-negotiation.
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