Dish TV (DISHTV) - ICICI Direct

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Nov 1, 2016 ... Maintains guidance of ~1.5-1.9 million net adds in FY17E. Dish TV's subscriber addition, in Q2FY17, was lower than expected at. 0.26 million ...
Result Update November 1, 2016

Dish TV (DISHTV)

Rating matrix Rating Target Target Period Potential Upside

: : : :

Hold | 90 12 months -8%

Another weak quarter…. •

What’s changed? Target EPS FY17E EPS FY18E Rating

Changed from | 87 to | 90 Changed from | 2.2 to | 2.1 Changed from | 3.6 to | 3.2 Unchanged

Quarterly performance Revenue EBITDA EBITDA (%) PAT

Q2FY17 779.3 264.2 33.9 70.1

Q2FY16 YoY (%) 752.4 3.6 255.0 3.6 33.9 1 bps NA 86.9

Q1FY17 QoQ (%) 778.6 0.1 264.6 -0.2 34.0 -8 bps 40.9 71.5



Key financials | Crore Net Sales EBITDA Net Profit EPS (|)

FY15 2,773 733 3 0.0

FY16 3,051 1,025 692 6.5

FY17E 3,189 1,098 219 2.1

| 98

FY18E 3,659 1,299 346 3.2



Dish TV reported its Q2FY17 numbers with revenues at | 779.3 crore, up 3.6% YoY, lower than our expectation of | 797.7 crore owing to lower-than-expected subscriber growth. ARPU (like-to-like) during the quarter came in at | 162 vs. | 165 in Q1FY17 (lower than our expectation - | 165), resulting in subscription revenues at | 728.8 crore, lower than expectations of | 747.5 crore. The subscriber addition came in lower-than-expected at 0.26 million (our estimate 0.38 million) but largely in line with other DTH players like Videocon & Airtel, which added 0.23 million & 0.26 million, respectively, in the quarter. The net subscriber base stood at 15.1 million EBITDA came in at | 264.2 crore vs. our expectation of | 279.8 crore, up 3.6% YoY. Margins came in at 33.9% (vs. our estimate of 35.0%), owing to miss on the revenue front and lower activation revenues, which is high margin in nature PAT was at | 70.1 crore, higher than our estimate at | 59.4 crore, despite miss on the topline front owing to deferred tax credit of | 13.6 crore

Maintains guidance of ~1.5-1.9 million net adds in FY17E Valuation summary P/E Target P/E EV / EBITDA P/BV RoNW RoCE

FY15 NM NM 15.6 NM NM NM

FY16 15.0 13.8 10.9 27.3 181.9 31.1

FY17E 47.5 43.6 10.1 17.4 36.6 30.5

FY18E 30.0 27.6 8.2 11.0 36.6 40.2

Stock data Particular Market Capitalization Total Debt (FY16) Cash (FY16) EV 52 week H/L

Amount 10,392.5 1,156.4 339.2 11,127.7 109/ 65

Dish TV’s subscriber addition, in Q2FY17, was lower than expected at 0.26 million (our estimate 0.38 mn) but largely in line with other DTH players like Videocon & Airtel, which added 0.23 mn & 0.26 million, respectively. However, we also note that Dish has gradually slipped in terms of markets share in net additions from a leader with~30%+ in FY12 to ~25% currently, which clearly is a sign of worry. The net subscriber base was at 15.1 million as on Q2FY17. The company maintained its net subscriber addition guidance of 1.5-1.9 million in FY17E. We build in net adds of 1.5 million and 1.3 millions in FY17E and FY18E, respectively. Focus shifts away from ARPU growth

Research Analysts

We highlight that Dish, over the last couple of quarters, has displayed a weaker ARPU trajectory vis-à-vis its peers who seemed to have portrayed a better ability to take price hikes. ARPU during the quarter came in | 162 vs. | 165 in Q1FY17 despite price hikes in March, 2016 to the tune of 48% as customers resorted to down-trading of packs. We also note that its peers like Videocon DTH and Airtel, also reported flattish ARPU QoQ. It indicated that ARPU decline could be attributed to a) lower gross additions, b) downtrading of packs, c) superior addition from smaller towns where preference is towards low priced packs and d) pressures owing to delay in Phase II monetisation by cable industry. The company refrained from guiding on ARPU and indicated that its current focus would be on revenue and EBITDA growth. We also believe that Phase IV expansion would put further pressure on ARPU growth. Hence, we lower ARPU estimates to | 163.1 & | 171.7 for FY17E and FY18E, respectively.

Bhupendra Tiwary

Yet to display marked improvement; maintain HOLD

[email protected]

We highlight that Dish, in recent years, has seemed to have let go its grip on the leadership position by slipping both in terms of ARPU growth and market share in net addition. Furthermore, we also remain wary of frequent changes in accounting practices by the company and the prospect of the same getting accepted by the regulators. We continue to await a marked improvement in ARPU growth trajectory and recovery in net adds market share before changing our stance on the company. Therefore, we maintain our HOLD recommendation with TP of | 90.

Equity capital Face value

106.6 1.0

Price performance Dish TV Hathway Cable

1M -1.2 23.5

3M 2.0 -2.4

6M 5.0 -14.8

12M -11.3 -28.9

Sneha Agarwal [email protected]

ICICI Securities Ltd | Retail Equity Research

Variance analysis Q2FY17 Q2FY17E 779.3 797.7

Revenue

Q2FY16 752.4

Q1FY17 778.6

YoY (%) QoQ (%) 3.6 0.1

Other Income Employee Expenses License Fees Selling and Distribution expenses Programing Cost Other Operating Cost Others EBITDA EBITDA Margin (%)

11.1 36.4 55.1 112.5 238.9 70.1 2.1 264.2 33.9

18.4 36.0 55.1 120.9 239.5 68.1 2.6 279.8 35.0

19.7 29.6 0.0 106.0 203.5 155.1 -34.7 255.0 33.9

11.9 38.1 54.0 117.5 232.6 65.9 5.9 264.6 34.0

-43.7 23.0 NA 6.1 17 -54.8 -106 3.6 1 bps

-6.4 -4.4 NA -4.2 3 6.5 -65 -0.2 -8 bps

Depreciation Interest

163.5 55.4

156.2 50.7

133.0 54.8

161.3 52.1

22.9 1

1.4 6

Total Tax PAT

-13.6 70.1

27.6 59.4

0.0 86.9

22.3 40.9

NA NA

-161 71.5

0.26

0.38

0.34

0.40

-23.4

-35.6

15.10 162.0

15.28 165.1

13.70 171.0

14.90 165.1

10.2 -5.3

1.3 -1.9

Key Metrics Net Subscriber Additions (Mn)

Net Subscribers (Mn) ARPU (in |)

Comments Revenues came in lower than our expectation of | 797.7 crore owing to lower than expected subscriber growth and lower ARPU (due to downtrading by the customers)

Margins came in at 33.9% (vs. our estimate of 35.0%), owing to miss on the revenue front and lower activation revenues which is high margin in nature.

PAT came in higher than our estimates, despite the miss on the topline front, owing to deferred tax of | 13.6 crore The net subscriber addition came in lower than expected at 0.26 million (our estimate 0.38 mn) but largely in line with other DTH players like Videocon & Airtel, which added 0.23 mn & 0.26 milli on, respectively, The ARPU was hit despite price hike taken in March, 2016, as the customers resorted to downtrading

Source: Company, ICICIdirect.com Research

Change in estimates (| Crore) Revenue

Old 3,223.8

EBITDA EBITDA Margin (%) PAT EPS (|)

1,117.7 34.7 233.9 2.2

FY17E New % Change 3,189.4 -1.1 1,098.1 34.4 218.8 2.1

-1.8 -27 bps -6.4 -6.7

Old 3,820.5

FY18E New % Change 3,658.6 -4.2

1,360.5 35.6 382.6 3.6

1,298.9 35.5 345.9 3.2

-4.5 -11 bps -9.6 -9.6

Comments The cut in topline estimate is owing to lower ARPU estimates as per the management guidance The margin estimates have been tweaked to incorporate H1FY17 results Resultant earnings estimate cut is owing to lower topline estimates

Source: Company, ICICIdirect.com Research

Assumptions z

Net Subscriber Additions (Mn)

FY15 1.5

FY16E 1.6

Current FY17E FY18E 1.5 1.3

Earlier FY17E FY18E 1.6 1.3

Net Subscribers (Mn) ARPU (in |)

12.9 175.4

14.5 172.0

16.0 163.1

17.3 171.7

16.1 166.3

17.4 179.9

Monthly Churn Rate

0.6%

0.7%

0.7%

0.6%

0.7%

0.6%

Comments We build in 1.5 million net subscriber addition i.e, lower end of management's guidance of seeding of ~1.5-1.9 million boxes in FY17E We lower our ARPU estimates based on management guidance of focussing more on subscriber addition and less on ARPU growth

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Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 2

Company Analysis Company guides for ~1.5-1.9 million net adds in FY17E … Dish TV subscriber addition, in Q2FY17, was lower than expected at 0.26 million (our estimate 0.38 mn) but largely in line with other DTH players like Videocon & Airtel, which added 0.23 mn & 0.26 million, respectively. However, we also note that Dish has gradually slipped in terms of markets share in net additions from being a leader with~30+% in FY12 to ~25% currently, which clearly is a sign of worry. The net subscriber base was at 15.1 million as on Q2FY17. The company maintained its net subscriber addition guidance to 1.5-1.9 million in FY17E. We build in net adds of 1.5 million and 1.3 millions in FY17E and FY18E, respectively. Exhibit 1: Subscriber details trends 180

20.0 18.0

175

175

16.0

172

170

14.0

172

12.0

165

163

10.0 8.0

160

158

6.0

155

4.0 2.0 0.0

170

10.7

11.4

12.9

14.5

16.0

17.3

FY13

FY14

FY15E

FY16E

FY17E

FY18E

Net Subscribers (million) - LHS

150 145

ARPU (|)

FY17E & FY18E ARPU are not comparable owing to change in accounting policy Source: Company, ICICIdirect.com Research

ARPU disappoints again, management refrains from giving guidance… We highlight that Dish, over the last couple of quarters, has displayed weaker ARPU trajectory vis-à-vis its peers who seemed to have portrayed a better ability to take price hikes. ARPU during the quarter came in | 162 vs. | 165 in Q1FY17, despite price hikes in March, 2016 to the tune of 48% as customers resorted to down-trading of packs. We also note that its peers like Videocon DTH and Airtel, also reported flattish ARPU on QoQ. It indicated that ARPU decline could be attributed to a) lower gross additions, b) downtrading of packs, c) superior addition from smaller towns where preference is towards low priced packs and d) pressures owing to delay in Phase II monetisation by cable industry. The company refrained from guiding on ARPU and indicated that its current focus would be revenues and EBITDA growth. We also believe that Phase IV expansion would further pressurise ARPU growth. We, therefore lower ARPU estimates to | 163.1 & | 171.7 for FY17E and FY18E respectively. Margins to optically look better after accounting change From Q1FY17 onwards, Dish reports revenues net of entertainment tax vs. gross earlier. As a result of the accounting change the company also expects saving in terms of the entertainment tax of ~| 17-18 crore, which would now be charged as a percentage on net revenues. Furthermore, the company also expects potential cut in license fee to 8% from 10% per Trai suggestion to boosts margins. The company also expects to benefit from GST implementation. For the time being, we do not build in licence fee and GST benefits. We have build in EBITDA margins of 34.4% in FY17E and 35.5% in FY17E and FY18E respectively.

ICICI Securities Ltd | Retail Equity Research

Page 3

Exhibit 2: EBITDA trend 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 (5.0) (10.0)

33.6 26.7

25.0

26.4

34.4

22.7

6.9 (1.6) FY13

FY14

35.5

9.5

0.1 FY15E

FY16E

FY17E

FY18E

(5.8) EBITDA Margins %

NPM %

Source: Company, ICICIdirect.com Research

Other Highlights:

ICICI Securities Ltd | Retail Equity Research



Digitisation Update: Phase IV will get implemented over a three year period. There are 84 million TV households (HHs) with 38 million already digitised in Phase IV. The opportunity of 46 million is likely to get digitised 50% by DTH and 50% by cable



The set top box inventory stood at 0.7 million as on Q2FY17



Capex for the quarter was at | 180 crore (| 350 crore for H1FY17). Guidance for FY17E was at | 800 crore



The management indicated that for the time being it has deferred the price hike which was planned to be taken during Diwali



Out of the total gross add during the quarter, HD formed 30% Zing formed 12% while 20-22% addition was for minimum | 174 package



Gross debt was at | 1275 crore (of which | 300 crore is rupee denominated debt and remaining is US$ denominated) and net debt was | 625 crore



Content cost: Content cost during the quarter included | 12 crore due to one-off. It maintained annual guidance of 10-12% increase in content cost for FY17



The management expects online platforms to be a key mode of addition, going ahead. The current subscriber addition from online platform stands at 6000-7000/month, which should improve further, going ahead.



Draft tariff order: The management expects the tariff order to bring in transparency and customer welfare. However, it would await final order as it believes there are few “omissions” and “optimistic presumptions”. It expects the MSO carriage revenue to be hit to an extent of 35% based on new tariff regulations, while there would be no dip in carriage/placement revenue for Dish TV.

Page 4

Valuation We highlight that Dish, in recent years, seems to have let go its grip on the leadership position by slipping both in terms of ARPU growth and market share in net addition. Furthermore, we also remain wary of frequent changes in accounting practices by the company and the prospect of the same getting accepted by the regulators. We continue to await a marked improvement in ARPU growth trajectory and recovery in net adds market share before changing our stance on the company. Therefore, we maintain our HOLD recommendation with a target price of | 90. Exhibit 3: DCF assumptions Particulars WACC Revenue CAGR over FY16E - FY22E PV of Cash Flow Till Terminal Year Terminal Growth Present Value of terminal cash flow PV of firm Less: Net Debt Total present value of the Equity (excluding current cash) Number of Equity Shares outstanding DCF - Target price (|)

Amount 12.6% 12.2% 3,758.7 3.0% 6,524.9 10,283.6 735.2 9,548.4 106.6 90

Source: Company, ICICIdirect.com Research

Exhibit 4: Valuations FY15 FY16 FY17E FY18E

Sales (| cr) 2,773.2 3,050.7 3,189.4 3,658.6

Growth (%) 28.0 10.0 4.5 14.7

EP S (|) 0.0 6.5 2.1 3.2

Growth (%) NA NA (68.4) 58.1

PE (x) NA NA 47.5 30.0

EV/EBITDA (x) 15.6 10.9 10.1 8.2

RoNW (%) NM 181.9 36.6 36.6

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 5

RoCE (%) 15.4 31.1 30.5 40.2

Recommendation History vs. Consensus Estimates 95.0

140 120

90.0

80

85.0

60

80.0

(%)

(|)

100

40 75.0

20 0

70.0 Oct-14

Jan-15

Mar-15 Price

Jun-15

Aug-15

Idirect target

Oct-15

Jan-16

Mar-16

Consensus Target Mean

Jun-16

Aug-16

Nov-16

% Consensus with BUY

Source: Bloomberg, Company, ICICIdirect.com Research

Key events Date Mar-11

Event Registers a very high churn of 1.94 million subscribers and records a churn rate of 2.3%

Jun-12

Sunset date for Phase I of digitisation. Dish TV able to add only 1.1 million net susbcribers

Mar-13

Sunset date for Phase II of digitisation. Dish TV able to add only 1.1 million net susbcribers

Jan-14

Dish TV starts offering all the Indiacast UTV (except ETV) channels on an a la carte basis

Mar-14

Dish TV issues disconnection notice to 10 channels distributed by IndiaCast UTV, including CNBC-TV18 and IBN7 and some ETV regional channels, claiming low popularity In a bid to provide customised local television channels to regional viewers of the state, Dish TV India rolls out a new brand Zing. The new brand will offer regional channels as the base while other segments can be added as per the needs of customers

Mar-14 Jul-14 Jan-15

Trai recommends license period extension to 20 years from 10 years, renewable for 10 years at once and license fees calulation as 8% of adjusted gross revenues vs. 10% of gross revenues paid currently Launches Zing in Tamil Nadu

Source: Company, ICICIdirect.com Research

Top 10 Shareholders No. 1 2 3 4 5 6 7 8 9 10

Name Essel Group Agrani Holdings Mauritius, Ltd. Manning & Napier Advisors, LLC HDFC Asset Management Co., Ltd. Reliance Nippon Life Asset Management Limited Birla Sun Life Asset Management Company Ltd. Artisan Partners Limited Partnership Hasham Investment & Trading Co., Pvt. Ltd. Columbia Threadneedle Investments (US) Van Eck Associates Corporation

Shareholding Pattern Latest Filing Date % O/S 30-Jun-16 59.78 30-Jun-16 3.30 30-Sep-16 1.92 31-Aug-16 1.39 30-Sep-16 1.37 30-Sep-16 1.28 30-Jun-16 1.13 30-Jun-16 1.00 30-Sep-16 0.99 30-Jun-16 0.90

Positionsition Change 637.21M 0.0 35.17M 0.0 20.45M +12.36M 14.86M +3.30M 14.56M -1.41M 13.64M -0.80M 12.03M +0.58M 10.68M 0.0 10.52M -0.39M 9.61M 0.0

(in %) Promoter FII DII Others

Sep-15 Dec-15 Mar-16 64.5 64.4 64.4 19.8 8.7 11.3 4.0 5.8 6.2 11.8 21.0 18.1

Jun-16 Sep-16 64.4 64.4 12.5 19.8 6.9 6.5 16.2 9.3

Source: Reuters, ICICIdirect.com Research

Recent Activity Buys Name Manning & Napier Advisors, LLC HDFC Asset Management Co., Ltd. Artisan Partners Limited Partnership Mirae Asset Global Investments (Hong Kong) Limited Banque Degroof Luxembourg S.A.

Value +17.30M +4.86M +0.83M +0.67M +0.20M

Shares +12.36M +3.30M +0.58M +0.43M +0.15M

Sells Name Macquarie Funds Management Hong Kong Ltd. Axis Asset Management Company Limited Tata Asset Management Limited L&T Investment Management Limited Reliance Nippon Life Asset Management Limited

Value -10.76M -6.23M -4.34M -2.17M -1.97M

Shares -7.44M -4.45M -3.00M -1.55M -1.41M

Source: Reuters, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 6

Financial summary Profit and loss statement

| Crore

Cash flow statement

(Year-end March) Total operating Income Growth (%) Employee Expenses Administrative Expenses Programing Cost License Fees Commission

FY15 2781.6 10.9 101.8 118.0 800.8 288.8 248.9

FY16 3059.9 10.0 122.9 0.0 855.5 217.5 -

FY17E 3194.2 4.4 148.1 83.4 957.3 230.0 -

FY18E 3660.2 14.6 154.5 193.9 1068.3 263.4 -

(Year-end March) Profit after Tax Add: Depreciation Add: Interest Paid (Inc)/dec in Current Assets Inc/(dec) in CL and Provisions Others CF from operating activities

Other Expenses Total Operating Expenditure

490.3 2048.5

839.2 2035.0

677.3 2096.1

681.2 2361.3

733.1 NM 613.8 175.4 63.5 7.4 0.0 0.0 4.2 3.1 NM 0.0

1024.9 39.8 590.7 208.7 64.0 289.5 0.0 0.0 -402.9 692.4 NM 6.5

1098.1 7.1 653.8 212.6 49.0 280.6 0.0 0.0 61.8 218.8 -68.4 2.1

1298.9 18.3 709.8 132.8 60.0 516.2 0.0 0.0 170.4 345.9 58.1 3.2

FY15

FY16E

FY17E

FY18E

106.6 -419.9 -313.4 1,483.9 18.3 1,188.8

106.6 274.1 380.7 1,156.4 63.5 1,600.6

106.6 491.3 597.9 956.4 63.5 1,617.8

106.6 837.2 943.8 606.4 63.5 1,613.7

EBITDA Growth (%) Depreciation Interest Other Income PBT Exceptional Items Prior Period Items Total Tax PAT Growth (%) EPS (|)

| Crore FY15 3.1 613.8 208.7 -136.9 396.0 (33.3) 1,051.5

FY16E 692.4 590.7 212.6 60.6 361.3 (3.9) 1,913.7

FY17E 218.8 653.8 132.8 -15.6 106.3 79.8 1,176.0

FY18E 345.9 709.8 0.0 -69.4 359.7 132.8 1,478.8

(Inc)/dec in Investments (Inc)/dec in Fixed Assets

0.0 -785.2

-32.0 -1,059.7

-50.0 -900.0

-300.0 -800.0

Others CF from investing activities Issue/(Buy back) of Equity Inc/(dec) in loan funds Dividend paid & dividend tax Interest Paid Others CF from financing activities Net Cash flow Opening Cash Closing Cash

-75.4 -860.6 0.1 74.4 0.0 208.7 -388.1 -105.0 86.0 342.6 428.6

-376.8 -1,468.6 0.0 -327.5 0.0 212.6 -419.7 -534.6 -89.4 428.6 339.2

0.0 -950.0 0.0 -200.0 0.0 132.8 -347.1 -414.2 -188.2 339.2 150.9

0.0 -1,100.0 0.0 -350.0 0.0 0.0 -132.8 -482.8 -104.0 150.9 46.9

Source: Company, ICICIdirect.com Research

Source: Company, ICICIdirect.com Research

Balance sheet (Year-end March) Liabilities Equity Capital Reserve and Surplus Total Shareholders funds Total Debt Other Non Current Liabilities Total Liabilities

| Crore

Assets Gross Block

4,809.5

5,716.4

6,616.4

7,416.4

Less: Acc Depreciation Net Block Capital WIP Total Fixed Assets Net Intangible Assets Investments Inventory Debtors Loans and Advances Other Current Assets Cash Total Current Assets Creditors Provisions Total Current Liabilities Net Current Assets Other Non Current Assets Profit & Loss (Negative) Application of Funds

3,355.6 1,453.9 497.2 1,951.0 200.0 9.9 63.7 474.8 21.6 428.6 998.5 903.8 1,073.7 1,977.5 -979.0 16.7 0.0 1,188.8

3,946.3 1,770.1 650.0 2,420.1 232.0 12.6 72.5 400.1 24.3 339.2 848.5 1,106.4 1,232.4 2,338.8 -1,490.3 438.7 0.0 1,600.6

4,600.1 2,016.2 650.0 2,666.2 282.0 13.1 68.2 418.2 25.4 150.9 675.9 1,156.7 1,288.4 2,445.1 -1,769.2 438.7 0.0 1,617.8

5,309.9 2,106.5 650.0 2,756.5 582.0 15.1 70.4 479.8 29.2 46.9 641.3 1,326.9 1,478.0 2,804.8 -2,163.6 438.7 0.0 1,613.7

Key ratios (Year-end March) Per share data (|) EPS Cash EPS BV DPS Cash Per Share Operating Ratios (%)

FY15

FY16

FY17E

FY18E

0.0 5.8 -2.9 0.0 4.0

6.5 12.0 3.6 0.0 3.2

2.1 8.2 5.6 0.0 1.4

3.2 9.9 8.9 0.0 0.4

EBITDA Margin PBT / Total Operating income

26.4 4.3

33.6 14.2

34.4 13.9

35.5 16.1

PAT Margin Inventory days Debtor days Creditor days Return Ratios (%) RoE RoCE RoIC Valuation Ratios (x) P/E EV / EBITDA EV / Net Sales Market Cap / Sales Price to Book Value Solvency Ratios Debt/EBITDA Debt / Equity Current Ratio Quick Ratio

0.1

22.7

6.9

9.5

1.3 8.4 16.7

1.5 8.7 27.5

1.5 7.8 27.5

1.5 7.0 27.5

NM NM NM

181.9 31.1 479.1

36.6 30.5 180.5

36.6 40.2 300.6

NM 15.6 4.1 0.0 0.0

NM 10.9 3.6 0.0 0.0

47.5 10.1 3.5 0.0 0.0

30.0 8.2 2.9 0.0 0.0

2.0 -4.7 0.3 0.3

1.1 3.0 0.2 0.2

0.9 1.6 0.2 0.2

0.5 0.6 0.2 0.2

Source: Company, ICICIdirect.com Research

Source: Company, ICICIdirect.com Research

.

ICICI Securities Ltd | Retail Equity Research

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ICICIdirect.com coverage universe (Media) EPS (|) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) CMP M Cap Sector / Company (|) TP(|) Rating (| Cr) FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E 385 455 Buy 7,076 16.1 21.3 25.2 23.8 18.1 15.3 13.3 9.8 8.3 29.9 31.8 32.5 22.0 23.7 23.9 DB Corp (DBCORP) 98 90 Hold 10,488 6.5 2.1 3.2 15.1 47.9 30.3 11.0 10.2 8.3 31.1 30.5 40.2 181.9 36.6 36.6 DISH TV (DISHTV) 792 800 Buy 3,775 21.0 17.4 23.4 37.8 45.4 33.9 24.2 23.3 17.1 14.5 14.2 17.3 13.0 9.8 11.7 ENIL (ENTNET) 196 225 Hold 1,831 22.9 22.1 28.0 8.5 8.9 7.0 5.7 7.0 5.3 14.0 12.0 14.9 12.1 11.0 12.2 Eros (EROINT) 94 86 Hold 2,195 7.2 6.4 7.5 13.1 14.7 12.6 8.1 5.8 4.8 10.7 11.7 12.5 8.2 6.8 7.4 HT Media (HTMED) 245 270 Hold 2,247 8.4 6.5 9.7 29.0 37.8 25.2 12.8 13.2 10.1 11.1 9.9 12.8 10.9 7.3 9.9 Inox Leisure (INOX) 195 220 Buy 6,375 13.6 12.5 14.7 14.3 15.6 13.3 11.1 9.1 7.4 23.9 26.7 28.3 22.5 22.1 21.8 Jagran Prakashan 1,237 1,375 Buy 5,782 25.4 24.6 32.6 48.6 50.3 37.9 18.2 15.9 12.7 15.6 14.9 17.6 14.3 11.9 13.6 PVR (PVRLIM) 545 480 Hold 21,464 23.2 27.3 31.9 23.5 19.9 17.1 11.3 10.0 8.6 36.1 39.8 42.9 24.9 27.7 29.8 Sun TV (SUNTV) 337 363 Buy 2,010 15.8 18.8 24.1 21.3 18.0 14.0 12.6 10.0 7.7 27.6 27.3 29.5 17.7 18.0 19.5 TV Today (TVTNET) 516 583 Buy 49,557 10.7 12.3 17.5 48.3 41.9 29.5 31.7 24.4 19.7 25.9 26.0 29.0 16.8 16.2 19.2 ZEE Ent. (ZEEENT) Source: Company, ICICIdirect.com Research

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RATING RATIONALE

ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more;

Pankaj Pandey

Head – Research

[email protected]

ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected]

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ANALYST CERTIFICATION We /I, Bhupendra Tiwary MBA, Sneha Agarwal, MBA Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.

Terms & conditions and other disclosures: ICICI Securities Limited is a Sebi registered Research Analyst having registration no. INH000000990. ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India’s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of which are available on www.icicibank.com. ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securitiesis is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances. This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction. ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months. ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts have any material conflict of interest at the time of publication of this report. It is confirmed that Bhupendra Tiwary MBA, Sneha Agarwal, MBA, Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ICICI Securities or its subsidiaries collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report. Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report. It is confirmed that Bhupendra Tiwary MBA, MBA Sneha Agarwal, MBA, Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report. ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report. We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

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