Trading Desk: Dish TV, GMR Infra, Jubilant
“Dish TV’s initiative to remove channels with low viewership from its package aims to lower content costs and increase carriage revenue,” IIFL said.
By ET Bureau | Updated:
“Dish TV’s initiative to remove channels with low viewership from its package aims to lower content costs and increase carriage revenue,” IIFL said.
“At present, Dish TV’s net content cost per sub (content cost less carriage revenue) at Rs 50 per month is much higher than Rs 10 per month for Hathway’s digital subs. Management targets flat or lower net content cost per sub in FY15 (vs. our estimate of 6% increase).
On the other hand, increase in net content costs of the cable industry and payment of taxes would compel it to raise tariffs, enabling DTH to increase prices. At 8.6 times FY15 earnings/ Ebitda, valuations are reasonable.”
GMR Infrastructure
Nirmal Bang has upgraded its rating on GMR Infrastructure from ‘Sell’ to ‘Hold’ with a target price of Rs 24.
The share was last traded at Rs 21.45 on the BSE. “We believe GMRIL is in the right direction with its focus on debt reduction via divestment of assets, value unlocking and focus on low-capex projects.
However, poor profitability will limit the upside,” Nirmal Bang said.
GMR Energy
GMRIL expects gross debt to peak out at Rs 450 billion in FY15 post completion of ongoing projects and witness reduction by Rs 100 billion over FY14EFY15E.
It has already cut debt by Rs 55 billion via divestment of assets — a 70% stake in GMR Energy (Singapore), and a 74% stake each in two road projects - and is in discussions with various parties for divestment of road projects, Turkey airport and some power generation projects in order to reduce debt further.
Jubilant Foodworks
Deutsche Bank has downgraded Jubilant Foodworks from ‘Buy’ to ‘Hold” with a target of Rs 1,350.
The stock was last traded at Rs 1,306. “We downgrade Jubilant to ‘Hold’ as the current valuation (45x 1-yr fwd) offers limited upside,” Deutsche Bank said.
“Our previous Buy rating (anti-consensus with 65% Sell ratings) was premised on 1) the availability of levers to manage a downturn better (faster store expansion, higher discounting to utilize high margins) and 2) valuations not commensurate with the strong long-term growth that we believe is intact.”
“At present, Dish TV’s net content cost per sub (content cost less carriage revenue) at Rs 50 per month is much higher than Rs 10 per month for Hathway’s digital subs. Management targets flat or lower net content cost per sub in FY15 (vs. our estimate of 6% increase).
On the other hand, increase in net content costs of the cable industry and payment of taxes would compel it to raise tariffs, enabling DTH to increase prices. At 8.6 times FY15 earnings/ Ebitda, valuations are reasonable.”
GMR Infrastructure
Nirmal Bang has upgraded its rating on GMR Infrastructure from ‘Sell’ to ‘Hold’ with a target price of Rs 24.
The share was last traded at Rs 21.45 on the BSE. “We believe GMRIL is in the right direction with its focus on debt reduction via divestment of assets, value unlocking and focus on low-capex projects.
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However, poor profitability will limit the upside,” Nirmal Bang said.
GMR Energy
GMRIL expects gross debt to peak out at Rs 450 billion in FY15 post completion of ongoing projects and witness reduction by Rs 100 billion over FY14EFY15E.
It has already cut debt by Rs 55 billion via divestment of assets — a 70% stake in GMR Energy (Singapore), and a 74% stake each in two road projects - and is in discussions with various parties for divestment of road projects, Turkey airport and some power generation projects in order to reduce debt further.
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Jubilant Foodworks
Deutsche Bank has downgraded Jubilant Foodworks from ‘Buy’ to ‘Hold” with a target of Rs 1,350.
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The stock was last traded at Rs 1,306. “We downgrade Jubilant to ‘Hold’ as the current valuation (45x 1-yr fwd) offers limited upside,” Deutsche Bank said.
“Our previous Buy rating (anti-consensus with 65% Sell ratings) was premised on 1) the availability of levers to manage a downturn better (faster store expansion, higher discounting to utilize high margins) and 2) valuations not commensurate with the strong long-term growth that we believe is intact.”
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