Higher interest outgo, selling costs hurt Dish TV's bottomline

K.Venkatasubramanian BL Research Bureau | Updated on November 17, 2017

Direct-to-home provider Dish TV has delivered on the revenue front during the September 2011 quarter, with customers being added at a rapid pace.

But with selling expenses continuing to increase and a falling rupee adding to the interest outgo burden, the company is yet to turn profitable at the net level.

During the quarter, revenues grew by about 48 per cent over the same period last fiscal to Rs 482.2 crore. Net losses have expanded from Rs 45.2 crore to Rs 48.6 Crore. Operating margin though continues to expand and stands at 25.2 per cent currently.

Dish TV has added 5.75 lakh subscribers during the quarter and has taken its overall customer base to 11.7 million. The company still maintains a market share of over 30 per cent, in a six-player market.

The average revenue per user has increased from Rs 139 last year to Rs 152 currently.

The company hopes to increase this by its HD offering and higher value packages. Effectiveness of these measures in the Indian market though remains to be seen. Offering newly released movies on DTH, a trend increasingly adopted by producers to de-risk failure at the box-office, may help the company's ARPUs.

Selling and distribution expenses have increased by over 24 per cent. Interest outgo has increased by over 79 per cent to Rs 63.4 crore, with rupee depreciation adding to the burden. Loan funds increased to Rs 1,208.9 crore from Rs 893.8 crore during the same period last fiscal. Another concern emerging in the quarter is that per subscriber acquisition cost, which was stable for a few quarters has risen to Rs 2,232 levels.

Published on October 19, 2011

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