On a year-on-year (y-o-y) basis, subscription revenues were down five per cent, while operating profit was down
Compiled by BS Research Bureau
23 per cent. Given pricing pressures and higher proportion of lower-priced packs, ARPUs, which have improved sequentially, are still down 10 per cent y-o-y. As in the March quarter, lower subscription revenues, higher costs and unfavourable operating leverage impacted profitability on a y-o-y basis. Operating profit margins in Q1 at 27.2 per cent were slightly below the estimates of 28 per cent. The firm suffered a net loss of Rs 13.9 crore, against an expectation of a profit, due to a 10 per cent rise in depreciation and 12 per cent rise in interest costs. A deferred tax write-back of Rs 17 crore subsidised a wider loss figure.
Subscriber additions are likely to pick up in the second half of FY18. With 70 per cent of its subscribers coming from the rural areas and a stronger distribution base, coupled with a good monsoon, Dish hopes to take a bigger chunk of the rural pie. It also expects some relief from FreeDish (Doordarshan’s DTH business), given plans to convert the free platform into an MPEG-4 encrypted platform.
While Dish could see some traction on subscriber base, the key for the Street will be the upcoming merger with Videocon (effective October 1). The company has indicated net savings of Rs 180 crore from the synergies in FY18 and Rs 510 crore in FY19, the latter is higher than analyst estimates of Rs 400 crore