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On Q-o-Q basis, for the quarter ended December 2016, operating revenues declined by 4% to Rs 747.98 crore. The company added 2.04 lakh subscribers taking the subscriber base at 15.3 million (net). Average Revenue per User (ARPU) at Rs 151.4 vs Rs 162 in Q2 FY17. Fall in ARPU QoQ because of accentuated impact of note ban OPM declined by 55bps to 33.4%. The net profit declined 62% to Rs 26.68 crore due to fall in topline
On Y-o-Y basis, quarter ended December 2016, operating revenues de-grew 3% at Rs 747.98 crore. The company added 2.04 lakh subscribers taking the subscriber base at 15.3 million (net). Average Revenue per User (ARPU) at Rs 151.4 vs Rs 172 in Q3 FY16. The Subscription revenue was at Rs 692.1 crore, down by 3%. OPM declined by 105bps to 33.4%. The net profit declined 61% to Rs 26.68 crore due to fall in topline.
Consolidated Performance
Quarterly Performance (Sequential)
(Subscription revenue is net of entertainment tax from 1st April 2016)
For the quarter ended December 2016, operating revenues declined by 4% to Rs 747.98 crore. The company added 2.04 lakh subscribers taking the subscriber base at 15.3 million (net). Average Revenue per User (ARPU) at Rs 151.4 vs Rs 162 in Q2 FY17. Fall in ARPU QoQ because of accentuated impact of note ban
OPM declined by 55bps to 33.4% due to increase in other expenditure. The operating profit declined by 6% to Rs 249.51 crore.
Other income increased by 63% to Rs 18.09 crore. Interest cost inclined by 7% to Rs 59.10 crore while depreciation & amortization charge increased by 1% at Rs 165.57 crore. The profit before tax decreased by 24% to Rs 42.93 crore.
Tax outgo for the quarter stood at Rs 16.25 crore. The net profit declined 62% to Rs 26.68 crore due to fall in topline.
Quarterly Performance (y-o-y)
(Subscription revenue is net of entertainment tax from 1st April 2016)
For the quarter ended December 2016, operating revenues de-grew 3% at Rs 747.98 crore. The company added 2.04 lakh subscribers taking the subscriber base at 15.3 million (net).
The third quarter being the period of festivals is generally the largest contributor to new subscriber additions during the year. Demonetization however impacted new subscriber additions also with the company recording an estimated 8-10% lower subscriber adds during the quarter.
Average Revenue per User (ARPU) at Rs 151.4 vs Rs 172 in Q3 FY16.
The Subscription revenue was at Rs 692.1 crore, down by 3%.
OPM declined by 105bps to 33.4% due to increase in programming cost and other expenditure. The operating profit declined by 6% to Rs 249.51 crore.
Other income increased by 331% to Rs 18.09 crore. Interest cost inclined by 8% to Rs 59.10 crore while depreciation & amortization charge increased by 13% at Rs 165.57 crore. The profit before tax decreased by 37% to Rs 42.93 crore.
Tax outgo for the quarter stood at Rs 16.25 crore. The net profit declined 61% to Rs 26.68 crore due to fall in topline.
For nine months ended December 2016
The operating revenues grew 2% at Rs 2305.83 crore. OPM inclined by 24 bps to33.8%. The operating profit increased by 3% to Rs 778.84 crore.
Other income declined by 16% to Rs 40.57 crore. Interest cost increased by 6% at Rs 166.60 crore. Depreciation & amortization charge increased 12% at Rs 490.31 crore. The profit before tax decreased by 22% to Rs 162.50 crore.
Tax outgo for the nine months stood at Rs 24.88 crore. The net profit declined by 34% to Rs 137.62 crore.
Management Comments:
Mr Jawahar Goel, Managing Director, said,
Limited cash supply made people defer their DTH recharges by a few days or weeks depending on the urgency of other basic necessities. The impact was stronger in the second tier and below towns and cities as most of the economy in these areas runs on cash. Our subscription revenues during the quarter could have been higher by around 8% in a non-adverse scenario. Lower growth eventually resulted in lower average revenues per user as well.
Subscribers as well as trade partners were extended temporary credit facilities basis their past transactions pattern. Subscriber awareness drives to promote alternate methods of payment were run both on the ground and on screen in addition to various other initiatives.
Though demonetization has led to an initial distress, it also will result in certain structural changes that are going to benefit the economy in the long run. As far as our business is concerned, the effect has already started coming in. As online payment transactions, credit cards and a less-cash society become buzz words today, we are happy to note an increase in our online transacting subscriber base from 30% to around 38% with around 22 digital wallets and the like being integrated with the company. Every online recharge transaction vis-à-vis EPRS based transaction implies savings on recharge commissions paid by us.
We believe that the negative impact of demonetization is only temporary and that with a strong subscriber growth rate, tight control on costs, reasonably steady free cash flows and a healthy balance sheet we should deliver sustainable growth. The rollout of the Goods and Services Tax (GST), a hopefully favourable license fee regime and a revenue conscious cable industry should only add to the strengths of Dish TV going forward.
Other Developments
Ministry of Information and Broadcasting (MIB) pushing forward the mandatory digitization Phase 3 date to 31 January 2017 and Phase 4 date
to 31 March 2017.
Work continued on the Dish TV-Videocon d2h proposed merger as well with necessary
applications being filed during the quarter
Shareholding Pattern
The Promoters stake stood at 64.44%.
Valuation
The stock is trading around Rs 87.20 on the bourses.
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