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Dish TV adds 338,000 net subs, Q2 EBITDA at Rs 255 cr

MUMBAI: Direct-to-home (DTH) player Dish TV has seen strong subscriber growth in the second quarter of the fiscal while content cost has dropped and there has been an expansion in operating margins.

The DTH company has added 338,000 subscribers in the quarter ended 30 September 2015, perhaps the highest in the industry.

Dish TV’s EBITDA margin stood at 33.9 per cent even as average revenue per user (ARPU) saw a slight dip compared to the trailing quarter.

Net profit

Continuing its bottom-line profitability, Dish TV has posted a consolidated net profit of Rs 87 crore (Rs 870 million) for the quarter ended 30 September 2015, compared to a net profit of Rs 54.2 crore (Rs 542 million) in the preceding quarter.

In the year-ago period, it had registered a net loss of Rs 13.3 crore (Rs 133 million).

Operating profit

Lower content cost has expanded Dish TV’s operating margin in the fiscal second quarter. Analysts feel that Dish TV’s EBITDA margin has room for further organic expansion.

EBITDA was at Rs 255 crore (Rs 2.55 billion), up 7.7 per cent from Rs 236.8 crore (Rs 2.37 billion) in the trailing quarter and 57.5 per cent higher than that in the year-ago period.

EBITDA margin expanded to 33.9 per cent, from 32.1 per cent in the trailing quarter.

Subscriber additions

Dish TV added 338,000 net subscribers in the second quarter and is well on its target of achieving 1.5-1.7 million new subscribers this fiscal. In the preceding quarter, the company had  390,000 new subscribers while in the year-ago period it had 378,000 additions.

Riding high on its regional sub-brand Zing, the company gained subscribers both in Phase III and IV markets.

Jawahar_GoelAccording to the company, its net subscriber base is at 13.7 million as on 30 September 2015. While the pace of Phase III digitisation is slow, the company is expecting to see an increase in uptake once the 31 December deadline is reached.

The proportion of HD subscribers in the net additions fell to 20.5 per cent from 23-25 per cent due to lower sports-related events. However, this should return to normalcy in the upcoming festive season.

ARPU

Dish TV’s consolidated ARPU in the fiscal second quarter was at Rs 171, compared to Rs 173 in the trailing quarter. The company clarified that excluding the impact of service tax increase, ARPU for the quarter would have stood at Rs 174.

The company has lowered ARPU guidance for the fiscal to 4.5 per cent (adjusting for service tax increase). Dish TV is also seeing higher subscriber additions from Phases III and IV.

As reported earlier by TelevisionPost.com, Dish TV is targeting ARPU growth of 6 per cent in FY16.

Content cost

Content cost has dropped quarter-on-quarter due to reversal of the inflation-linked pricing (recommended by TRAI) by the TDSAT.

Dish TV MD Jawahar Goel said, “Dish TV continued to actively contribute to the ‘Digital India’ movement by digitising analogue TV homes in DAS Phase III and IV markets. A unique product mix and a strong brand recall enabled us to add a healthy 338,000 net subscribers in a seasonally weak quarter. Our regional offering Zing is now available across eight states and continues to be in high demand in its target markets.”

Dr.-Subhash-Chandra,-ChairmanDish TV chairman Subhash Chandra said, “Dish TV further reinforced its leadership position during the quarter. The company, while being at the forefront of the DTH industry in India, reached out to television viewers with innovative products that promise to enhance their television viewing experience. Dish TV’s improving financial strength, coupled with its passion to be ahead of the curve, should be an advantage to further enhance its presence in the vast and still untapped analogue and free-to-air television markets in the country.”

 

Q2 financials

dishtv Q2FY16 main

Dish TV’s operating revenue was marginally up (2.1 per cent) at Rs 752.4 crore (Rs 7.52 billion) on a quarter-on-quarter basis. Subscription revenue, meanwhile, was at Rs 692.6 crore (Rs 6.93 billion), up from Rs 682.8 crore (Rs 6.83 billion) in Q1 FY16.

Meanwhile, Dish TV’s total expenses saw a 0.5 per cent decline.

 

dishtv Q2FY16 exp

The company’s free cash flow was at Rs 84.9 crore (Rs 849 million).

DishFlix

In August, Dish TV launched India’s first push video-on-demand service DishFlix.

The new service enables subscribers to watch advertisement-free movies and TV shows at the click of a button at an incremental monthly subscription of Rs 100. DishFlix offers over 50 movies and shows without any internet bandwidth requirement.

The company said that the new service has received an encouraging response and that it is on track to carve a niche market for itself.

Meanwhile, the Dish TV board has accepted resignation of Dish TV chairman and non-executive promoter-director Subhash Chandra effective immediately and has nominated Jawahar Goel as chairman of the board.

The board has also accepted resignation of Dish TV CEO RC Venkateish.

Moreover, following the exit of Apollo, the board has accepted the resignation of non-executive nominee director Mintoo Bhandari and his alternate director Utsav Baijal effective immediately.

Dish TV scrip closed at Rs 107.55 on Tuesday at the BSE, registering a 1.65 per cent drop. The trading volume on the counter spurted 4.61 times.

Also read:

Jawahar Goel to be acting CEO of Dish TV till replacement is found for Venkateish; Gaurav Goel gets expanded role