DEN Network is on prime time!

DEN Networks is amongst the top gainers on the BSE since morning. The stock price jumped up to Rs.91.20 intra day, 5% higher and continues to now hover around Rs.91 levels.

The stock is up as it is being seen a big beneficiary of the GST as it is expected to bring down the tax outgo the company and all DTH companies. It is expected that tax rates could go down by 2-4% from the current levels and that in turn could bring down the costs and boost demand.

Most analysts have already put out reports on how bringing in GST could help margin expansion and improve ease of doing business.

Currently the DTH industry is paying a plethora of taxes. It is paying entertainment tax ranging from 10 to 45%, service tax of 12.36% on its subscription revenue to the central government. It is also paying 10% of its gross subscription revenue as licence fee to the Union government. That’s not all – its equipments needed for DTH, like set-top boxes, dish antennas are also subject to VAT.

All this will now rationalized under one uniform tax and the total tax payment could come down significantly.