Dish TV India Q3FY13 Result Analysis

DSIJ Intelligence / 22 Jan 2013

With the onset of digitization, investor’s interest has been on the rise with the companies providing DTH services. Dish TV India promoted by the Zee group is one of them

With the onset of digitization, investor’s interest has been on the rise with the companies providing DTH services. Dish TV India promoted by the Zee group is one of them. The company came out with its Q3FY13 results today (January 22, 2013) and to the utter disappointment, the results of the company has not been on the better side. The same disappointment has been seen in the stock’s performance on the bourses in today’s trade. The scrip is hammered by more around 5%.

Let us go through the numbers that the company has announced.

Particulars (Rs/Cr)Q3FY13Q3FY12% Chg
Net Sales 556.68 493.07 12.9
EBITDA 137.72 131.46 4.76
Net Profit -44.88 -42.96 -4.47
EBITDA Margin (%) 24.74 26.66 -1.92
The topline has witnessed a growth of 12.90% on a YoY basis and stands at Rs 556.68 crore for Q3FY13 as against Rs 493.07 crore for Q3FY12. However, the company broaden its looses for this quarter, reporting a loss of Rs 44.88 crore for Q3FY13 from a loss of Rs 42.96 crore during the same quarter last year. On the EBITDA front the company witnessed growth of 4.76% on a YoY basis but there has been some pressure on the margins front. The EBITDA margins stood at 24.74% witnessing a drop of 192 bps on a YoY basis. The results for Q3FY13 has to be taken with a pinch of salt as the company has posted profit of Rs 55 crore in Q2FY13.

The increase in top line can be attributed to better addition of subscriber net adds. The company added 0.83 million new users and the ARPU remained steady at Rs 160 per user during the quarter. However, there is a shrink of 192 basis points in EBIDTA margins, which remained key contributor to the negative bottom line despite growing revenues.

However, apart from healthy subscriber addition and stable ARPU, in the results, the company reported decline in its subscriber acquisition cost to Rs 2201 in Q3FY13 as compared to Rs 2273 a quarter earlier.

Although the results are not one would have hoped for, nevertheless, the long term story of the stock remains intact visible from the stable ARPU and lower subscriber acquisition, which bodes well for the company.

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