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INTRODUCTION
About Dish
TV : -
Introduced in 2003, by Essel group, became a first direct to home (DTH) service in India
Market leader in DTH industry with 27% market share
Provides Services such as games, movies on demand, interactive TV other than normal 465
different channels
Three subsidiaries: -Integrated Subscriber Management Services (ISMSL), Agrani Satelite
Services (ASSL), Agrani Convergence (ACL)
500
50
38
46
Dish Mini
35
300
12
200 415
336
389
100
12
378
270
Companies
HD channels Total channel
220
Dish
Welcome
Dish A la
Carte
Dish Maxi
Product And
Services
Dish
Freedom
Dish Maxi
Plus
Chlid Pack
Dish
Freedom
Plus
Airtel; 19%
Videocon; 16%
Reliance Digital; 6%
Dish TV; 27%
Timeline: 2003
2004
2007
2009
2016
2011
2012
2013
2014
2015
25.8%
64.4%
Promoters ; 64.41
Business Model
Dish TV India Ltd.
Consolidated Revenue
21%
%
3%
3%
Subscription revenues
Lease rent
Bandwidth income
Advertising income
91%
Other income
INDUSTRIAL
OVERVIEW
Growth rate
Subscription
Revenues
In 2015, 65% of total revenue
Expected growth rate: - 16%
Penetration
250
196
200
168
161
150
Mn
100
82
80
90
Phase 1
50
0
For FY 2008-14,
Growth rate: - CAGR 12%,
from 241 Bn in 2008 to 472 Bn in
2014
For forecast period FY 2014-19
Expected growth rate: - 15.5%
Expected Market size: - 975 Bn (FY
2019)
2013
2014
2019E
Year
TV
Household
C&S Subscriber
200
175
180
160
147
160
129
140
107 114
120
96
100
85
Mn 80
57
60
43
40 25
20
0
year
Implementation in 4
metros by Dec. 2011
Target :- 13 Mn
households
Phase 3
Planned to tap 7709
urban areas by dec
2015
Phase 2
Implementation in
26 cities with
population more
than 1 Mn
by Mar. 2013
Target :- 13 Mn
households
Phase 4
Establish
infrastructure for
Dish cable TV for
rest of the India by
Dec 2016
REFERENCES
1) http://www.dishtv.in/
2)http://indianresearchjournals.com/
FUNDAMENTAL ANALYSIS
Revenue
3,102
2,782
2,509
2,167
1,957
FY12
FY13
FY14
FY15
FY16
172
170
165
160
155
25.33%
26.74%
157
163
40.00%
174
35.00%
33.72%
30.00%
25.00%
26.36%
20.00%
19.72%
151
15.00%
150
145
10.00%
140
5.00%
135
FY12
FY13
FY14
EBITDA
FY15
EBITDA Margin
FY16
0.00%
FUNDAMENTAL ANALYSIS
Asset Turnover Ratio
0.91
0.74
0.88
0.79
0.69
FY12
FY13
FY14
FY15
FY16
ARPU
172
174
163
157
151
FY12
FY13
FY14
FY15
FY16
Moat:
Maximum HD channels
Increasing
ARPU
Focus on
hardware sales
and ancillary
activities
Consistent
double digit
growth for 7
years
Differentiated
products
Movies on
demand
VALUATION
Below we outline the derivation of
our DCF valuation
Rs
EBIT
Tax
D&A
Wcap changes
Capex
FCFF
Disc Factor
PV of FCF
6,061
6,941
7,390
7,811
8,152
8,547
9,000
542
711
822
943
1,069
1,206
1,351
9,231
12,79
9
9,819
15,20
1
1,507
10,45
2
17,92
9
-6,788
-7,536
-7,842
8,182
3,944
4,779
6,662
8,712
8,546
10,50
1
1.1
1.3
1.5
1.7
2.2
3,944
4,779
5,825
6,660
7,019
7,479
7,766
8,009
WACC calculation
Values
8.00%
Risk premium
6.00%
Beta
1.3
Cost of equity
15.50%
11.00%
D/E ratio
WACC
Key Assumptions:
For calculation, we assume inflation adjusted economic growth rate as terminal growth rate
We have used Broker estimates and Thomson Reuter report to come up with a cost of capital figure
Revenue growth rate has been extrapolated from historic figures
0.25
14.40%
RECOMMENDATION
PV of CF
47,537
17929
TV of CF
89701
FCFF
Net debt
FCFE
O/s shares
Value per share
1,37,239
15,214
1,22,025
1065
115
From valuation perspective, we found that the implied share price is greater than the
current market price and hence we are recommending the BUY decision.
Thank You