Dish TV India Ltd. share price target

After few quarters of disappointment, Dish TV reported in-line results on both headline numbers and KPI's. Revenue growth along with control on advertisement spends aided EBITDA increase on sequential basis. ARPU was at Rs149 (+1% qoq), lower increase as compared to peers as full benefit of GST would accrue from Q3FY18. Churn reduced marginally to 0.8% vs 1% in the last...

EBITDA comes in above estimates: Dish TV (DITV) delivered healthy EBITDA growth of 7% QoQ (-18% YoY) to INR2.2b in 2QFY18, 4% above our estimate. Revenue grew 1% QoQ to INR7.5b, supported by a 2% improvement in subscription revenue. EBITDA margin improved 160bp QoQ, led by lower SG&A; costs, partly offset by higher transponder cost. Improving operating environment: EBITDA margin was also aided by the gradually reducing churn. Net subscriber addition stood at 188,000 to reach 15.9m (+1% QoQ), while ARPUs strengthened to INR149 v/s INR148 in the...

BUY with a TP of Rs 105. Our TP is based on pro-forma financials of the merged operations, and factors in Rs 2bn p.a. of synergy benefits (mgt target is Rs 5bn). Videocon D2H (VD2H), listed on Nasdaq, reported strong 2QFY18 numbers. After a subdued performance in recent quarters, VD2H registered healthy revenue growth of 8% QoQ, and EBITDA at an all-time high of Rs 2.8bn (+13% QoQ). ARPU growth of 7% QoQ from Rs 198 in 1QFY18 to Rs 212 in 2QFY18 is the key positive.

Our positive view on DITV despite weak FY17 is derived from its inexpensive valuations (7.6/6.5x FY19/20E EV/e), synergies from the merger, DAS IV digitisation and GST. Additional benefits can accrue from a reduction of license fees and TRAI's tariff order. Maintain BUY with a TP of Rs 105. The comparison of the annual reports for FY17 of DTH (direct-to-home) operators like Dish TV (DITV), Videocon D2H (VD2H), Tata Sky and Airtel DTH reveals healthy revenue (16%) and EBITDA (18%) growth for the industry, with the exception of DITV. This is despite increased competition from FreeDish.

Initiate coverage with BUY and a TP of Rs 105 @ 9x FY19E EV/e. Dish TV (DITV), a pioneer in Indias DTH (direct-to-home) space is coming off a phase of under-performance (-22% in three months). DITVs weak FY17 performance (EBITDA fell 5%) was in stark contrast with Videocon D2H and Airtel DTH (which posted EBITDA growth in the 20s). Persistently inferior subscriber stability and ARPU have undermined DITVs performance.

Dish TV's Q1FY18 revenues came in at | 738.9 crore, down 5.1% YoY, lower than our expectation of | 752 crore. Monthly ARPUs at | 148 (up 10.2% QoQ) were higher than our estimate of | 141, resulting in superior subscription revenues at | 691.7 crore, (against estimate of | 659.2 crore). Subscriber addition was largely in line at 186,000 (our estimate 200,000) with the net subscriber base at 15.7 million at the end of the quarter. The company attributed the weak subscriber addition to the festival of Ramzan, which fell in Q1...

Q4adj. EBITDA at Rs 2.2 bn was below consensus estimate of Rs 2.6 bn primarily on ~8% QoQ decline in adj. ARPU, given continued pack down grades across SD and HD subscribers.

Revenue fell by 5.27% to Rs. 708.57 Cr in Q4FY17 when compared to the previous quarter

Dish TV reported its Q4FY17 numbers with revenues at | 708.6 crore, down 11% YoY, lower than our expectation of | 752 crore. ARPU declined steeply to | 134.4 (as per our calculation) vs. expectation of | 150 translating into lower revenues. Subscription revenues came in lower at | 620.5 crore, (vs. estimate of | 696.1 crore ) owing to lower subscriber additions as no major cricketing event was present in the quarter as well as package downgrading by existing subscribers. Subscriber addition was lower at 165,000 (estimated 280,000)...

Dish TV once again disappointed with meaningful deterioration in subscription revenues, which management attributed to heightened impact of demonetization. Subscription revenue declined 10% qoq, impacted by ARPU decline of 11% qoq. Down trading to lower packs and HD to SD platform accelerated in 4Q, resulting to sharp decline in ARPU. Dish TV's performance was substantially weaker than Airtel DTH in terms of both ARPU and subscriber additions. One-off income restricted EBITDA decline. demonetization impact, down trading by subscribers has been the key concern from last few quarters. Subscriber addition guidance for FY18 is ~1.2mn vs 1mn added in FY17....