Dish TV
The stock tanked over 8% on Friday, the market showing great disappointment over the Q1FY14 numbers. Loss was as such expected but what was not expected was the marginal fall in EBITDA margin, which declined from 21.6% t0 21% (QoQ). EBIDTA came in at Rs.122 crore v/s 120 crore in Q4 thus more or less around the same levels. This was despite the 4% (QoQ) rise in revenue at Rs.576 crore. This poor EBIDTA was blamed on 32% rise in content cost vis-à-vis subscription revenue. Selling and distribution costs also rose 39%.
The good news was that ARPU for the quarter increased 5.1% to Rs. 165 resulting in a 15.9% YoY increase in subscription revenues. The subscriber acquisition cost (SAC) was lower at Rs.1,828 compared with Rs.1,996 in the immediately preceding quarter. The resultant free cash flow of Rs. 48 crore compares favorably with Rs. 22 crore in Q4 and Rs.65 crore in FY13. On 4th July, the company hiked acquisition price by Rs.250 and this is expected to ease the margins in Q2. It added 200,000 net subscribers in the quarter, taking its customer base to 15.1 million.
The company has also issued the right monitoring report which states that of the Rs.1140 crore collected in Jan 2009, till end of Q1FY14, it has utilized Rs.990 crore. In 2009, when the rights issue was made, Rs.41 crore was earmarked for general corporate purposes, since then it has been revised to Rs.347 crore, taking into the account the expenses of digitization. Of this, it has till date spent Rs.197 crore. It had allocated Rs.790 crore for acquisition of consumer premise but that has been reduced to Rs.260 crore. It had earmarked Rs.300 crore for repayment of loans and that has been hiked to Rs.527 crore. Both these monies have been fully utilsied. The company has stated that it plans to reduc e its debt by Rs.750 crore through the current fiscal. This is to done through internal accruals. By next fiscal, the management hopes to make the company debt free and it is this factor alone which can buoy the stock price.