Author - Maitreyee Vaishampayan

  • Maitreyee Vaishampayan
28 Feb

Volumes impacted due to Coronavirus: V. Kalyana Rama, CONCOR

Update on the Indian Equity Market:

On Thursday, investors continued rushing to safer assets on fears that the coronavirus outbreak is fast developing into a pandemic.

The broad market index, NIFTY50 ended the day marginally lower at 11,633. The two sectoral gainers were Pharma (+0.6%), and FMCG (+0.1%). Realty (-2.4%), Media (-2.4%), and PSU Bank (-2.3%) were the top losing sectors. The top gaining stocks were Sun Pharma (+3.6%), Britannia (+1.9%), and Titan (+1.9%) while Wipro (-3.5%), ONCG (-3.0%), and JSW Steel (-3.0%) led the losers.

Volumes impacted due to Corona Virus: V. Kalyana Rama, CONCOR

Excerpts from an interview with Mr V. Kalyana Rama, Chairman and MD, CONCOR published in Mint on 26th February 2020:

  • The last quarter witnessed a drop in the volumes of the company as the demand did not pick up. Even now the business is subdued; the volumes are impacted because of the coronavirus.
  • They have guided for a flat FY20 in the last quarter looking at the volumes. If the impact of coronavirus is worse than already considered, there might be a negative side.
  • There has been a provision for the Services Export from India Scheme (SEIS) income close to ₹ 861 crores, which was disallowed by the Directorate General of Foreign Trade (DGFT). CONCOR is contesting the disallowance of those claims. Disallowance leads to the formation of committee of secretaries and approvals from the government. The process is a work-in-progress and they are waiting for the outcome.
  • The government had announced it is willing to divest CONCOR with management control, transferring 30.8% share.
  • Despite the government announcement, business is going on as usual on 41 terminals on lease from the railways. There is absolutely no disruption on the business.
  • CONCOR is continuing with rail freight price policy announced in April 2019, for the current financial year. Any price change will be only in effect from FY21 and the market will be duly notified of it. As per the previous three-quarter numbers, there was a positive effect on the top line and the bottom line.
  • The coastal shipping business made some losses in the first nine months but they are not too worried about it. They are keeping a timeframe of three years to stabilize and turnover this business.

Consensus Estimate: (Source: market screener website)

  • The closing price of CONCOR was ₹ 510/- as of 27-February-2020.  The consensus earnings estimates are not available.
  • The company declared earnings of ₹ 2.9 per share for the quarter ending December 31 2019, versus ₹ 4.5 declared for the quarter ending December 31, 2018. It declared earnings of ₹ 19.95 per share for the year ended March 31, 2019.
By CONCOR , 0 Comments Read more...
18 Feb

‘Opportunities for growth delivery across segments’- Amitabh Chaudhry, Axis Bank

Update on the Indian Equity Market:

On Monday, Nifty 50 closed marginally lower at 12,046. IT was the only sector that ended marginally in the green. PSU Bank (-3.0%), Realty (-1.5%) and Media (-1.1%) were the top losers. Titan (+1.7%), GAIL (+1.6%) and Nestle (+1.6%) were the top gainers while Yes Bank (-4.0%), Coal India (-3.8%) and ONGC (-3.2%) were the top losers for the day.

‘Opportunities for growth delivery across segments’- Amitabh Chaudhry, Axis Bank

Excerpts of an interview with Amitabh Chaudhry, MD, and CEO, Axis Bank published in Mint on 17th February 2020:

  • The market share of Axis Bank is in the 4.5-5 percent range in deposits and loans. Opportunities are there and growth delivery across all businesses is possible. Although the loan growth has been good, the bank has seen some unexpected stress. Now the stock of overall stress has come down which will hopefully be reflected in the slippages.
  • The bank has been one of the most transparent ones in his view, in terms of disclosing numbers. Barring further shocks, from all the metrics, the future looks good, which they need to demonstrate in the coming quarters.
  • The growth is mainly coming from refinancing activity. No significant new activity has been observed. Hence, he is of the view that economic activity will take some time to pick up.
  • The SME side of the business is the first one to get a hit as the economic activity slows. The average realizations are coming down in a very calibrated way. In some sectors, the exposure has been reduced and some new relationships added.
  • The growth has been good in the retail segment, aided by slower lending by Non-banking financial companies (NBFCs) and the slowdown in consumption. Retail estate and some other asset classes also help in adding to the momentum in retail. In terms of the delinquencies and risk metrics, the bank is at historical lows except for CVC and some parts of MFI business.
  • The retail story is the talk of the day. Everyone is either already into the business or entering it. Either way, the probability of the retail cycle coming is increasing as time passes. The government is also trying to offer relief measures to push consumption, RBI also has a loose monetary policy, thus liquidity is there in the system.
  • Despite the rabi harvest being pretty good, there hasn’t been a significant pickup in tier-2 and tier-3. The slowdown has helped inventory stabilization at a reasonable level but there has not been any pickup in consumption as yet.
  • The government is trying to infuse liquidity to benefit both the real estate and NBFC sectors. Some of the troubled NHBCs today have high exposure to the real estate sector. So, if NBFC is okay and can start lending, the money is expected to go to the real estate sector.
  • The banker is of the view that the cleansing process is not over yet and that the government will continue going after people who have taken the system for a ride. So, that means there will be a negative surprise but they have to be prepared for it.
  • In the hindsight, it was a good thing they raised capital when they did. There is enough ‘firepower’ now for continued growth over the next few years, which will be used in a very calibrated manner.
  • The promises made as part of the GPS strategy haven’t changed yet. The aspirational 18% return on equity (ROE) is not possible. However, they have been able to maintain the long- term credit cost below 1 percent and cost to asset ratio below 2%. These promises were made because they believe they have the means to do something very different, digital banking is one of them.

Consensus Estimate: (source: market screener and investing.com websites)

  • The closing price of Axis Bank was ₹ 739/- as on 17-February-20. It traded at 2.5x/ 2.2x/ 1.9x the consensus Book Value estimate of ₹ 302/ 342/ 396 for FY20E/ FY21E/ FY22E respectively.
  • Consensus target price is ₹ 847/- which implies a Price to Book multiple of 2.1x on FY22E Book value of ₹ 396/-
By Axis Bank , , , 0 Comments Read more...
07 Feb

Gold should be viewed as an investment – S Subramaniam, Titan

Update on the Indian Equity Market:

On Thursday, the Monetary Policy Committee (MPC) of RBI decided to keep the policy repo rate unchanged and persevere with the accommodative stance as long as necessary to revive growth, while ensuring that inflation remains within the target.

The broad market index, Nifty50 ended the day marginally high. PSU Bank (+2.6%), Media (+1.6%) and Pharma (+1.3%) were the top gainers while FMCG (-0.6%), IT (-0.4%) and Realty (-0.3%) were the sectoral losers for the day. Amongst the stocks, Eicher Motors (5.4%), IndusInd Bank (+4.6%) and Zee Entertainment Enterprises (+3.9%) were the biggest gainers. Tata Motors (-2.9%), Cipla (-2%) and Titan (-1.6%) ended the day in the red.

Gold should be viewed as an investment – S Subramaniam, Titan

Excerpts of an interview with S Subramaniam, CFO, Titan. The interview was published in Livemint on February 6, 2020:

  • Titan recently released the 3QFY20 result. The numbers were largely in line with the street estimates and margins were better than expected.
  • Although the company is definitely gaining market share, it has been a bumpy ride. The months of October and November were pretty good but December was tough, so the market is a little shaky.
  • The CFO is hopeful of doing well in the coming quarter as well, the initial guidance of 11-13 percent growth in the jewelry segment has been maintained.
  • Growth in the jewelry business was guided at 2.5x by 2023, which may be at risk, considering that kind of growth is not happening. People looking at gold as an investment in addition to it being a jewelry item would help achieve that kind of growth.
  • The industry has been in pretty bad shape for a variety of reasons. The month of December saw a surge in the gold prices, which did not help. A lot of the jewelers are undergoing financial crises with a pretty bad liquidity situation. Those with adequate funds can possibly do better. Else this pain will continue industry-wide for some more time.
  • Moving to other business segments, the watch segment, World of Titan has witnessed 11 percent growth in the quarter. Although the growth was phenomenal, opportunity was missed on the trade channel because of stocking and in the e-commerce channel. 10 percent of the revenues come from the e-commerce segment which has been slowing down.
  • Margins would be an area of concern for the watch segment. It is expected to perform better including in the next quarter (Q4).
  • The expectation is that margin-wise, the company performance would be better in FY20 than FY19.
  • Growth has been challenging for the eyewear segment. The profitability challenges continue, which need to be addressed.

Consensus Estimate: (Source: market screener and investing.com websites)

  • The closing price of Titan was ₹ 1259/- as on 6-February 2020. It traded at 69.6x/ 54.5x/ 45.6x the consensus earnings estimate of ₹ 18.1/ 23.1/ 27.6 for FY20E/ FY21E/ FY22E respectively.
  • Consensus target price of ₹ 1204 /- implies a PE multiple of 44x on FY22E EPS of ₹ 27.6 /-

 

By Titan , , , 0 Comments Read more...
30 Jan

Looking to raise equity & cash through restructuring – Habil Khorakiwala, Wockhardt

Update on the Indian Equity Market:

On Wednesday, Nifty ended 0.6% higher at 12,130. Among the sectoral indices, Nifty FMCG (+1.3%), Nifty Metal (+0.9%) and Nifty Auto (+0.8%) were the top gainers. Nifty Pharma ended the day marginally in the red. Tata Motors (+6.8%), Bajaj Finance (+5.1%) and Infratel (+3.4%) were the top gaining stocks while Eicher Motors (-4.5%), Yes Bank (-1.4%) and Dr Reddy (-1.4%) were the top losers.

Looking to raise equity & cash through restructuring – Habil Khorakiwala, Wockhardt

Excerpts from an interview with Habil Khorakiwala, Founder, Chairman and Group CEO, Wockhardt:

  • The company is looking to raise some equity and cash through a restructuring of the organization. There are alternatives on which the company is working.
  • The restructuring process would likely be completed in the next month.
  • The Q3 financial results of the company were recently released, and sales are up 9-10 percent compared to the previous quarter. Expense management over the last 9-12 months has resulted in significant operating cost reduction.
  • The 3Q margins (17.7%) are among the highest in recent times and a result of product mix. Despite spending heavily on both R&D and capex, there is a significant increase in EBITDA without R&D.
  • Addressing the liquidity issue, he said that last year the company has repaid ₹ 780 crore of its debt. The net debt increase period has been supported by the promoter. The new cash is to sustain drug discovery research programme and go into growth momentum in 2021.
  • They have completed most of the remediation measures at their Waluj facility and are in communication with the US FDA and hopeful of being on track as far as the US business is concerned.
  • There are three components to their India business: branded, generic, and active pharmaceutical ingredient (API) business. The branded business is down by less than a single digit. Though mostly discontinued, the generic business is showing a decline. The API business in India is down but up in the international markets.
  • Globally, their focus is on three-four areas. Their pharma business is important worldwide, including India. The research programme with the new chemical entity (NCE) is very important for the therapy area antibiotics. Third, the biosimilars are very important since new FDA guidelines has them thinking about entering the US market biosimilars segment. Last, due to technology advantage in formulation, the worldwide diabetic portfolio is a favorite.
  • Strategy for the antibiotic drug is marketing themselves in the US and India and looking for partners in the rest of the world.
  • Two of their molecules (EMROK (IV) and EMROK 0 (Oral)) have been approved by the Drug Controller General of India, which will be in the Indian market in the next three-four months. Another molecule, 5222 is entering phase-III clinical trial in the next few months.

Consensus Estimate:

The closing price of Wockhardt was ₹ 349 as of 29-January-20. The consensus estimate for EPS of Wockhardt is not available. Wockhardt reported a loss of ₹ 10.6 per share for FY19 and ₹ 13.8 for 9 months ending December 19 respectively.

 

By Healthcare , 0 Comments Read more...
21 Jan

Focus on medical value travel in the Union Budget- Suneeta Reddy, MD, Apollo Hospitals

Update on the Indian Equity Market:

After a volatile session, the Nifty closed 1 percent lower at 12231. This decline was the biggest in three months. The Nifty Realty (+0.4%) was the only sectoral index which ended the day in the positive. Nifty Media (-1.9%), Nifty PSU Bank (-1.6%), Nifty Pvt Bank (-1.6%) and Nifty Bank (-1.6%) were amongst those that ended in the red. Powergrid (+3.0%), Infratel (+1.6%) and Bharti Airtel (+1.4%) were the top gainers. Kotak Bank (-4.8%), Zee Entertainment Enterprises (-4.2%) and IOC (-4.1%) were the top stocks that ended in the negative.

Focus on medical value travel in the Union Budget- Suneeta Reddy, MD, Apollo Hospitals

Excerpts from an interview with Ms Suneeta Reddy, MD, Apollo Hospitals published in Livemint on 20th January 2020:

  • The utilization of proceeds from Apollo Munich transaction is definitely going to debt reduction. The stake sale proceeds received by the family after-tax is ₹ 980 crore and Apollo will get around ₹ 250 crore.
  • They will end the quarter in January with 28% promoter pledging and over the next two years, hope to bring it down to 10%. The cash flows from the education vertical will help bring down the pledge. The free cash flows from the education segment will help reduce the debt, so there won’t be a need for further promoter stake sale.
  • Gross debt will be around ₹ 2,900 crore and net debt will be around ₹ 2,500 crore this year.
  • The process of restructuring the pharmacy business is expected to happen in the next three months and it would generate ₹ 300 crore.
  • Although the focus is on debt reduction, the focus will also be on consolidating the assets and improving asset utilization. The replacement capex is about ₹ 250 crore.
  • They currently operate at 8.5% margin levels and are hoping to move to 14% over the next two quarters.
  • The new hospitals are operating at 21% EBITDA margin which is expected to move up 100 basis points (bps), through improvement in the quality of revenue. An 8% volume growth in this region is also expected.
  • There has been a growth of 22-24% in the pharmacy business. The EBITDA margin, currently at 5.4% are expected to improve on the back of new store additions and the old stores maturing.
  • Moving to the clinic segment which turned profitable for the first time in Q2, the 250 diagnostic centres will drive the growth in this segment, and will contribute to Apollo Hospital’s bottom-line.
  • The proton therapy segment, which is the first facility opened in South East Asia, will break even in the second year. Having finished 100 patents, there is a waiting list of patients and about 30 percent of the patients are overseas patients.
  • 12% of revenues of Apollo Hospitals comes from foreign patients. Since the budget is around the corner, she believes the focus will be to help hospitals and improve their margins. The focus will also be on infrastructure spending and there might be some incentives for hospitals to put up new infrastructure or add to the existing facilities.

Consensus Estimate (Source: market screener website)

  • The closing price of Apollo Hospitals as on 20-January-2020 was ₹ 1632/-. It traded at 61.6x / 45.3x / 32x the consensus EPS estimate for FY20E/21E/22E of ₹ 26.5/ 36.0 /51.1 respectively.
  • Consensus target price of ₹ 1667/- implies a PE multiple of 32.6x on FY22E EPS of ₹ 51.1.
By Healthcare , , 0 Comments Read more...
10 Jan

‘Pricing is not an issue because we have hit rock bottom and it can only get better from here. It cannot get worse than this’ – Ravi Vishwanath, CFO, Teamlease

Update on the Indian Equity Market:

There was optimism in the global markets after US President Donald Trump’s comments on the Iran conflict eased worries. On Thursday, Nifty50 ended 1.6% higher at 12,216. Nifty Realty (+2.7%), Nifty Auto (+2.7%) and Nifty PSU Bank (+2.4%) were the top gainers among sectoral indices. Nifty IT (-0.2%) was the only sector that ended the day in the red. Among the stocks, JSW Steel (+5.9%), Infratel (5.4%) and Tata Motors (+5.4%) were the biggest gainers while TCS (-1.6%), Coal India (-1.1%) and HCL Tech (-0.8%) ended in the red.

‘Pricing is not an issue because we have hit rock bottom and it can only get better from here. It cannot get worse than this’ – Ravi Vishwanath, CFO, Teamlease

Excerpts from an interview with Ravi Vishwanath, CFO, Teamlease with ETNOW on January 8, 2020:

  • Talking about the outlook on the staffing business, he says they expected a better offtake in the general staffing business but some amount of slowness has percolated into Q4 from Q3.
  • The pipeline continues to be strong and they are hopeful on the deals they are pursuing.
  • There is still nervousness in the market. Temporary staffing is still okay as people expect things will be getting back to normal sooner rather than later.
  • On the productivity front, they are working on multiple projects on the tech backend. Their focus is on these backend IT projects, which are expected to contribute to productivity soon.
  • Some one-time charges had impacted the company’s margins in H1. They do not expect those charges in H2, so margins will be on similar lines as seen in the past.
  • When asked how has the acquisition of IMSI, a company focussed on infrastructure management, he said that they basically complete the portfolio of services that Team Lease has to offer in the IT staffing space. With the acquisition complete, they are now focussed on integrating all the services under a common leadership at the backend.
  • They have exited 75-80% of the margin dilutive projects they entered into last year and are hopeful of exiting from the others before 31st March. Then, they expect telecom margins to be back to 4-5% like what they were in the past.
  • There is some interest with companies for telecom staffing, which is a good sign for the telecom staffing business.
  • Since there are no entry barriers in the highly fragmented industry, there has been a lot of new entrants. However, there are huge barriers to scale in this industry. That is why there aren’t many companies with more than a 50,000 headcount. TeamLease operates with all organised players and there aren’t many smaller companies that have been able to reach that scale.
  • Since they work with recognised names, pricing does not seem to be an issue and he is hopeful that it can only get better from here.

Consensus Estimate (Source: market screener website)

  • The closing price of TeamLease Services was ₹ 2,590/- as on 09-January-20. It traded at 45x/ 31x/ 24x the consensus EPS of ₹ 57.8 / 83.3 / 110 for FY20E/ FY21E/ FY22E respectively.
  • Consensus target price is ₹ 2,900/- which implies a PE multiple of 26x on FY22E EPS of ₹ 110/-
By TeamLease , 0 Comments Read more...
27 Dec

Focus on vertical strengthening of product portfolio, market momentum expected in Q4: Sunil Bothra, Minda Industries

Update on the Indian Equity Market:

On Thursday, Nifty closed 0.7% lower at 12,126. Among the stocks, ONGC(+2.5%), Vedanta (+1.9%) and JSW Steel (+1.0%) were the gainers. Yes Bank (-4.4%), Bharti Airtel (-2.0%), and Reliance (-1.9%) ended in the red. Nifty Media (+0.1%) and Nifty Metal (+0.6%) were the only sectors which ended in the positive. Nifty PSU Bank (-1.5%), Nifty Pharma (-0.9%) and Nifty Bank (-0.9%) were the worst-performing sectors.

Focus on vertical strengthening of product portfolio, market momentum expected in Q4: Sunil Bothra, Minda Industries

Excerpts from an interview with Mr Sunil Bothra, Executive Director and Group Chief Financial Officer, Minda Industries:

  • The existing sensor business is more than 5 years old and as part of their strategy, they are in a long-term partnership with Sensata Technologies.
  • Sensata, which was previously Texas Instruments have many businesses which are into defence and other technologies.
  • Minda Industries has entered into an agreement with Sensata to acquire the wheel speed sensor business. The agreement will help to acquire the customer base in India and South Korea and will also make global opportunities available.
  • Although the acquisition cost only ₹ 45 crore, it is expected to generate an additional revenue of ₹100-120 crore in the next four years. With this acquisition, the fresh investment in the sensor business will reach ₹ 145 crore and it is expected to generate revenue of ₹ 500-600 crore in the next 4-5 years.
  • The company has been focussing on vertically strengthening the product portfolio, which they have done by undertaking small acquisitions. Now that they have more than 30 businesses or products, the focus is on strengthening their technological capability and offering to the OEs.
  • The recently concluded acquisition of Delvis will help strengthen their technology position in 4-wheeler lamps, thereby strengthening the sensor business.
  • Talking about the demand, he said the company has seen some green shoots in October, which led to a little increase in volume in a few original equipment manufacturers in November.
  • Since December is generally a lean period, Q3 is not very bullish as compared to Q2.
  • Some market momentum is expected in Q4. But they will have to wait and see how the market pans out post the BS-VI launch from April 1, since there will be price impact of 10-12%.
  • If they are able to increase their kit value per car or 2-wheeler or OE in Q4, they are hopeful of continuing the overperformance in the near future.      

Consensus Estimate: (Source: market screener website)

  • The closing price of Minda Industries was ₹ 348 /- as of 26-December-19. It traded at 32.8 x/ 23.4x / 18.5x the consensus EPS estimate for FY20E/ FY21E/ FY22E of ₹ 10.6/14.9 /18.8 respectively.
  • Consensus target price of ₹ 383/- implies a PE multiple of 20.4x on FY22E EPS of ₹ 18.8/-.
By Auto Ancillary , , , 0 Comments Read more...
16 Dec

Gold financing is our core competency and will stick to it: Mr George Muthoot, MD, Muthoot Finance

Update on the Indian Equity Market:

On Friday, NIFTY ended 1% higher at 12,087. Among the sectoral indices, Nifty PSU Bank (+4%), Nifty Metal (+2.3%) and Nifty Realty (1.7%) were the biggest gainers. None of the indices ended in the red. The stocks rallied on the back of optimism over a trade deal between the US and China. Adding to the sentiment was the victory of the Conservative Party in the UK elections. Among the Nifty50 stocks, Axis Bank (+4.2%), Vedanta (+3.8%) and Hindalco (+3.6%) were the biggest gainers.  Dr Reddy’s Laboratories (-2.8%), Bharti Airtel (-2.0%) and Zee Entertainment Enterprises (-1.6%) were amongst the losers.        

Gold financing is our core competency and will stick to it: Mr George Muthoot, MD, Muthoot Finance

Excerpts from an interview with Mr George Alexander Muthoot, MD, Muthoot Finance published in Economic Times on 10th December 2019:

  • The core strength of the business is gold financing. 90 per cent of the portfolio is only gold loans. Focusing on their core competency is has helped them get good business till date.
  • Their business is not dependent on gold prices since the average tenure of the loans is four months. If there was a sudden movement like 50 per cent fall in gold prices in two-three months, it would be a problem. Small up or down movement in the prices does not affect their business.
  • Talking about the business opportunity, he said that the market is huge since there are 30,000 tonnes of gold lying as ornaments. The organised gold lending market is just about 100-200 tonnes.
  • As the market develops, more and more people are using the opportunity to monetise the idle gold. To attract new customers, they are undertaking a lot of advertising.
  • Moving on to the rationale behind purchasing IDBI’s AMC business, he says the company has good customers who have been investing in the company because they relate to the company and are confident of depositing their money with them. The company believes that if they were to start a mutual fund, they will retain their customers.
  • Although the company has guided for revenue growth of 15 per cent, they would probably achieve 15-20 per cent growth this year. Gold finance acts as bridge finance for people unable to get loans from the banks. Once people are able to obtain a bank loan, they replace the gold loan with it.
  • People have a variety of options to obtain financing. Microfinance or fintech finance has not affected the gold financing market.
  • Their focus is on customer convenience. The average ticket size is ₹ 40,000, there is no service charge or pre-payment charges.
  • On diversifying the core business, he said the gold loan is their core strength and they will stick to it. Mutual funds are just a service offered to the customers. It is just a way for customers to deposit their excess money.

Consensus Estimate (Source: market screener and investing.com websites)

  • The closing price of Muthoot Finance was ₹ 717/-  as of 13-December-19. It traded at 2.5 x/2.1 x/ 1.8 x the consensus book value per share (BVPS) of ₹ 285/ 338/ 397 for FY20E/21E/22E respectively.
  • Consensus target price of ₹ 779 implies a PB multiple of 1.9 x on FY22E BVPS of ₹ 397/-.
By Gold loan NBFC, Muthoot Finance 0 Comments Read more...
11 Dec

Rs 600 Crore debt repayment in the next 6 months: Mr Anil Dua, Group CEO, Dish TV

Update on the Indian Equity Market:

On Tuesday, NIFTY50 closed 0.7% lower at 11,857. None of the sectors ended in green. The top losing sectors were Media (-1.9%), PSU Bank (-1.6%), Metal (-1.4%) and IT (-1.4%). The gainers among the stocks were Bajaj Finance (+1.3%), Hindustan Unilever (+1.1%), and Cipla (+1.1%). The top losers were Yes Bank (-10.4%), Zee Entertainment Enterprises (-5.1%), and GAIL (-4.4%).

Excerpts from an interview with Mr Anil Dua, Group CEO, Dish TV, published in Livemint dated 10th December 2019:

  • There has been a downgrade from CARE on the short-term bank facility due to a delay in a ₹250 crore short-term loan. This is a temporary downgrade, due to the bunching of some payments.
  • The company has paid ₹ 850 crores in the last eight months and will pay another ₹ 600 crore in the next six months. This repayment will include the ₹ 250 crore delayed payment.
  • Once the debt is less than ₹ 2,000 crore level, they will be comfortable as their Earnings before Interest, taxes, depreciation and amortisation (EBITDA) is more than ₹2,000 crores.
  • They plan to repay about ₹ 800 crores next year as well. This repayment will mostly be done by internal accruals. The company is hoping to get alternate credit facilities to finance their regular capex so that utilisation of cash flow can be normalised towards debt repayment.
  • Talking about the business environment in the new tariff regime, he said the transitional disruption has now settled down.
  • They hope to continue building on their subscriber base and investing into the future with new products such as their new android box.
  • With revenue of more than ₹ 6,000 crores and EBITDA of more than ₹ 2,000 crores, they expect an improvement in EBITDA margins as seen in the last quarter.
  • The Videocon merger has helped realise synergies in interest cost, power cost, logistics, transport and administration. They expect to realise more synergies in content cost, which has been impacted by the new tariff order.

Consensus Estimate (Source: market screener website)

  • The closing price of Dish TV India was ₹ 13/- as of 10-December-19. It traded at 21 x/8.7 x/ 5.4 x the consensus EPS of ₹ 0.6 /1.5 /2.4 for FY20E/FY21E/FY22E respectively.          
  • Consensus target price of ₹ 27.8/- implies a PE multiple of 12x on FY22E EPS of ₹ 2.6.
By Dish TV, Entertainment , , , 0 Comments Read more...