Dish TV gains 4% as Ebitda meets analysts estimate

NEW DELHI: Shares of Dish TV soared 4 per cent in Friday’s trade after the company reported operating profit in line with analyst expectations. Healthy net subscriber addition of 0.40 million and stable fresh cash flow overshadowed concerns over the company’s inability to report a rise in average revenue per user (Arpu) despite a price hike in March.

The stock rose 3.83 per cent to hit a high of Rs 97.50 on BSE.

The company reported a 24.61 per cent drop in net profit at Rs 40.87 crore for the June quarter, compared with Rs 54.21 crore in the year-ago quarter. Sales for June quarter rose 5.86 per cent YoY to Rs 777.59 crore from Rs 734.56 crore in the same quarter last year.

“Phase IV digitisation will exert some pressure on Arpu, but Dish TV expects HD additions to lend support to Arpu in FY17,” brokerage Edelweiss Securities said in a note.

“We believe the company is better placed owing to Phase III and IV digitisation and funding issues of MSOs. We maintain ‘buy/SP’ rating on the stock with a target price of Rs 121, suggesting 10 times FY18E EV/Ebitda. At the prevailing price, the stock trades at 9.2 times FY17E and 7.8 times FY18E EV/Ebitda," the brokerage said.