Dish TV - Q4 FY2012 and FY 2012 Results - First Cut.

[RAJESH DESAI]

 

Dear Sir/Madam,

 

Dish TV India Limited (Dish TV) announced its Q4 FY2012 and FY2012 results on 16 May 2012. The company’s top line came above our estimates while its bottom line lagged our expectations due to higher than expected depreciation expenditure and foreign exchange loss. A glimpse of Dish TV’s Q4 FY2012 and FY2012 results is as follows:

 

Dish TV reported a healthy 6.9% sequential growth in revenues to `524.5 Crores in Q4 FY2012, which beat our estimates. Increase in the company’s top line was mainly driven by addition of 0.41 Mn new users  and improved Average Revenue Per User (ARPU) during the quarter, For FY2012 as well, Dish TV’s incremental sales was propelled by addition of 2.5 Mn new users and strong ARPU of `153. In addition, reflecting a sequential improvement of 300 basis points (bps) and 667 bps y-o-y expansion, the company reported its all time high Earnings before Interest Depreciation Tax and Amortization (EBIDTA) Margins of 27.5% in Q4 FY2012. Dish TV’s EBIDTA increased higher than expectations, 20.0% q-o-q, or 59.9% y-o-y, to `144.2 Crores during the quarter.

 

However, Dish TV’s commendable performance until EBIDTA level failed to translate in bottom line growth due to higher depreciation charge and foreign exchange losses. While the company reported a significant sequential expansion of 36.2% in depreciation expenditure to `167.83 Crores, it reported a foreign exchange loss of `6.50 Crores in Q4 FY2012. These factors also kept Dish TV’s net income below our estimates. A sharp increase in depreciation can be attributed to reclassification of certain Consumer Premise Equipment’s (CPE’s) life to three years from five years. This factor was the sole reason for depreciation remaining above our estimates.

 

Nevertheless, Dish TV’s cash generation capability remained unaffected of the enhanced depreciation. We believe, with continued investment in new technologies, vast channel offerings, and the government’s push for digitization,  the company may continue to register healthy performance in the upcoming quarters as well. With this, we retain a BUY rating on the stock at current juncture.     

 

Note: Quarterly numbers in the above tables represent standalone results while for FY2012, consolidated numbers are displayed.  

 

 

Regards,

 

Team Microsec Research

 

 

 

--
CA. Rajesh Desai