17 May 2012
4QFY12 Results Update | Sector: Media
Dish TV
BSE SENSEX
S&P CNX
16,030
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel. Perf. (%)
M.Cap. (INR b)
M.Cap. (USD b)
4,858
DITV IN
1,064
94/52
-2/-11/-7
58.5
1.1
CMP: INR55
TP: INR58
Neutral
Dish TV’s 4QFY12 EBITDA grew 60% YoY and 20% QoQ to INR1.44b. While subscription revenue growth (+2%
QoQ) remained muted for second consecutive quarter, EBITDA growth was largely driven by higher lease
rental and other revenues.
EBITDA margin improved 300bp QoQ to 27.5%. EBITDA ex lease rental grew 4% QoQ to INR0.78b (15% of rev).
Net loss increased 32% YoY and 14% QoQ to INR490m despite lower forex loss (INR65m in 4QFY12 v/s INR156m
in 3QFY12) as there a one-time additional depreciation costs of ~INR300m booked during the quarter.
Revenue grew 7% QoQ to INR5.25b, primarily led by higher lease rental income (+47% QoQ to INR660m) and
“other” revenues (+26% QoQ).
Subscription revenue grew 2% QoQ (likely lowest ever) to INR4.3b largely led by 2% increase in net subscriber
base to 9.6m and flat ARPU at INR151.
Gross adds at 0.42m declined 44% QoQ - lowest in ten quarters. Gross sub base increased ~3% QoQ to 12.9m.
Monthly churn rate (based on net subscribers) declined to ~0.9% per month (~0.27m subscribers churned
during the quarter) vs 1.1-1.6% in previous three quarters.
Weak macro environment has been impacting subscriber additions as well as ARPU (due to continued down-
trading by subscribers) for DITV.
Management expects FY13 gross adds for the DTH industry at 8-9m excluding the impact of digitization.
Digitization opportunity in phase I is estimated at ~7m of which DTH operators could gain upto 50%.
Meaningful uptick in ARPU is unlikely in the current environment given that most DTH operators/MSOs will
focus on “subscriber grab” to take advantage of the mandatory digitization schedule.
We are downgrading our revenue and EBITDA estimates by 2-4% and TP by ~10% given weak subscriber
additions and ARPU outlook.
The stock trades at EV/EBITDA of 10.4x FY13E and 8.2x FY14E. Maintain
Neutral
with a target price of INR58/sh
(INR65/sh earlier).
Shobhit Khare
(Shobhit.Khare@MotilalOswal.com); +91 22 3982 5428

Dish TV
Subscription revenue up 2% QoQ; net adds down ~50% QoQ
Revenue grew 7% QoQ to INR5.2b, primarily driven by higher lease rental income
and other revenue.
Subscription revenue grew 2% QoQ (likely lowest ever growth) to INR4.3b driven
by 2% increase in net subscriber base to 9.6m and flat ARPU at INR151.
Subscription revenue accounted for ~83% of total revenue for DITV.
Lease rental revenue increased 20% YoY and 47% QoQ to INR660m. Lease rental is
expected to trend down going forward as DITV has increased the amortization
period from three years to five years.
Subscriber additions remained under significant pressure. While gross additions
declined 44% QoQ to 0.42m given high 3Q base due to festive demand, net adds
declined ~50% QoQ to ~0.15m.
On the positive side, DITV management has successfully brought the churn rate
under control. On a net subscriber basis, monthly churn rate is estimated to have
declined to 0.9% vs 1.1-1.6% during previous three quarters.
Higher QoQ revenue growth driven by non-subscription income
Subscription revenue accounted for 83% of 4QFY12 revenue
Gross subscriber base up to 12.9m, Net base at 9.6m
17 May 2012
Source: Company/MOSL
2

Dish TV
Gross as well as net adds down 45-50% QoQ; churn down meaningfully
Source: Company/MOSL
EBITDA up 20% QoQ on reported basis; up 4% QoQ adjusting for lease
rentals
EBITDA grew 60% YoY and 20% QoQ to INR1.44b. Margin expanded ~300bps QoQ to
27.5%.
Content and programming cost declined 7% QoQ to INR1.47b due to renegotiation
of some contracts. However the negotiation with Media-Pro is currently under
progress.
Other direct expenses increased 21% QoQ due to increase in transponder charges
which were impacted by INR depreciation and included full-year impact (charges
are fixed in USD).
Selling and distribution expenses remained largely flat QoQ as increase in
marketing costs was offset by lower commissions.
DITV: Quarterly EBITDA (INR b)
Programming and content costs declined on QoQ basis (%)
Source: Company/MOSL
17 May 2012
3

Dish TV
ARPU, SAC flat QoQ
DITV reported monthly ARPU of INR151, flat QoQ and YoY, below management
guidance of INR155.
ARPU has remained stable over last several quarters despite price hikes undertaken
by the company due to consumer down trading and loss of revenue due to delayed
recharging.
Subscriber acquisition cost remained flat QoQ at INR2,127.
ARPU has remained ~INR150-152 for the last five quarters
Subscriber acquisition costs flat QoQ
Source: Company/MOSL
Downgrading revenue/EBITDA 2-4%; maintain Neutral with TP of INR58
Weak macro environment has been impacting subscriber additions as well as ARPU
(due to continued down-trading by subscribers) for DITV.
Management expects FY13 gross adds at 2.5m excluding the impact of digitization.
Digitization opportunity in phase I is estimated at ~7m of which DTH operators
could gain upto 50%.
Meaningful uptick in ARPU is unlikely in the current environment given that most
DTH operators/MSOs will focus on “subscriber grab” to take advantage of the
mandatory digitization schedule.
We are downgrading our revenue and EBITDA estimates by 2-4% and TP by ~10%
given weak subscriber additions and ARPU outlook.
At CMP of INR55, the stock trades at EV/EBITDA of 10.4x FY13E and 8.2x FY14E.
Maintain Neutral with a target price of INR58/sh (INR65/sh earlier).
17 May 2012
4

Dish TV
DITV: Summary of estimate change
FY13E
Gross subscribers (m)
Old
16.6
New
16.1
Change (%)
-3.2
Net subscribers (m)
Old
11.9
New
11.5
Change (%)
-2.8
Gross adds (m)
Old
3.5
New
3.2
Change (%)
-8.6
Net adds (m)
Old
2.0
New
1.9
Change (%)
-5.8
ARPU (INR/month)
Old
162
New
156
Change (%)
-3.7
Annual churn (% of net subs)
Old
14
New
12
Change (bp)
-138
STB capex/gross add (INR)
Old
2,213
New
2,396
Change (%)
8.3
FY14E
20.6
20.1
-2.6
14.0
13.9
-0.7
4.0
4.0
0.0
2.1
2.4
11.0
171
162
-5.1
14
13
-160
2,168
2,304
6.2
Revenue (INR b)
Old
New
Change (%)
Operating costs
Old
New
Change (%)
EBITDA (INR b)
Old
New
Change (%)
Net Profit (INR b)
Old
New
Change (%)
Depreciation (INR b)
Old
New
Change (%)
Net Finance Cost (INR b)
Old
New
Change (%)
EBITDA Margin (%)
Old
New
Change (%)
FY13E
23.4
22.9
-2.3
17.1
16.7
-2.6
6.3
6.2
-1.6
0.4
0.0
-86.9
4.9
5.2
6.9
1.3
1.2
-10.2
26.9
27.1
20
FY14E
29.2
28.5
-2.2
20.8
20.5
-1.4
8.3
8.0
-4.0
1.6
0.9
-45.4
5.7
6.2
8.4
1.5
1.3
-13.0
28.5
28.0
-55
Source: Company/MOSL
17 May 2012
5

Dish TV
Dish TV: an investment profile
Company description
DITV enjoys a leadership position, with ~30% subscriber
share in the fast-growing 6-player Indian DTH market.
As of March 2012, DITV had 9.6m active DTH subscribers.
Recent developments
DITV board approves the completion of
incorporation of Joint Venture Subsidiary Company
(Dish T V Lanka (Private) Limited) in Sri Lanka.
Key investment argument
DTH technology is leading the digitization wave, with
industry subscriber base of ~40m or one third of the
total cable and satellite base of ~120m.
DITV is well positioned to benefit from the ongoing
digitalization further boosted by government
regulations to phase-out analogue broadcasting
which should drive 22% revenue CAGR and 30%
EBITDA CAGR over FY12-14E.
Valuation and view
Key investment risks
Likely increase in competitive activity as six DTH
operators and several MSOs might see digitalization
as an opportunity to grab subscribers.
Lower room to squeeze content cost percentage
further down.
Weak macro environment has been impacting
subscriber additions as well as ARPU (due to
continued down-trading by subscribers) for DITV.
Management expects FY13 gross adds at 2.5m
excluding the impact of digitization. Digitization
opportunity in phase I is estimated at ~7m of which
DTH operators could gain upto 50%.
Meaningful uptick in ARPU is unlikely in the current
environment given that most DTH operators/MSOs
will focus on “subscriber grab” to take advantage
of the mandatory digitization schedule.
We are downgrading our revenue and EBITDA
estimates by 2-4% and TP by ~10% given weak
subscriber additions and ARPU outlook.
At CMP of INR55, the stock trades at EV/EBITDA of
10.4x FY13E and 8.2x FY14E. Maintain
Neutral
with a
target price of INR58/sh (INR65/sh earlier).
Comparative valuations
P/E (x)
EV/EBITDA (x)
EV/Sales (x)
P/BV (x)
FY13E
FY14E
FY13E
FY14E
FY13E
FY14E
FY13E
FY14E
Dish TV
N.A.
67.3
10.4
8.2
2.8
2.3
N.A.
N.A.
ZEEL
19.3
17.0
13.6
12.0
3.5
3.2
3.5
3.1
Sun TV
12.7
10.8
5.8
4.8
4.7
3.9
3.7
3.3
EPS: MOSL forecast v/s consensus (INR)
MOSL
Forecast
0.0
0.8
Consensus
Forecast
0.4
1.7
Variation
(%)
-
-53.2
FY13
FY14
Target price and recommendation
Current
Price (INR)
55
Target
Price (INR)
58
Upside
(%)
5.5
Reco.
Neutral
Stock performance (1 year)
Shareholding pattern (%)
Mar-12
Promoter
Domestic Inst
Foreign
Others
64.8
5.4
22.4
7.4
Dec-11
64.8
5.7
22.9
6.7
Mar-11
64.8
6.4
20.2
8.6
17 May 2012
6

Dish TV
Financials and Valuation
17 May 2012
7

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Dish TV
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