Motilal Oswal is bullish on Dish TV India has recommended buy rating on the stock with a target price of Rs 50 in its research report dated October 25, 2018.
Motilal Oswal 's research report on Dish TV India
Subscription revenue fell 2% QoQ to INR14.5b (4% miss) due to lower net subscriber addition and a decline in ARPU. This, coupled with muted other revenue, led to a 4% QoQ decline in consol. revenue to INR15.9b (4% miss). Consol. EBITDA declined 3% QoQ to INR5.4b (4% miss), mainly dragged by lower revenue, partly offset by 4% QoQ savings in opex. Yet, EBITDA margin expanded 30bp QoQ to 33.9%. PAT declined 9% QoQ to INR0.3b (72% miss) due to a decline in EBITDA.
Outlook
At CMP, the stock trades at EV/EBITDA of 3.3x FY19E and 2.5x FY20E. We lower our TP to INR50 (prior: INR80), ascribing 4x (~50% discount to three-year average and versus 7x earlier) to FY20E EBITDA on the back of a cut in our estimates due to the overhang from RJio’s aggressive broadband roll-out. The recent sharp correction factors in the negatives, making DITV attractively priced, in our view. Maintain Buy.
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