Dish TV: No santushti for shareholders

A part of the Essel group, promoted by the parent company Zee TV, Dish
TV is India's first Direct-to-Home (DTH) service provider. The company
is trying its level best to bring santushti to the viewers but alas,
the shareholders have little to feel even remotely santusht about!



The company for the second quarter ended 30th September 2007, posted a
net revenue of Rs.75.50 crore which was 15.44% lower than the revenue
posted in Q1. So right from the topline itself, the company has been
going downhill. Of the total revenue, Rs.71.54 crore came from DTH
services and the balance from teleport services and trading.



The company, incurred a total expense of Rs.122.73 crore in Q2, which
is 1.62 times the revenue earned and this does not even include the
interest and the depreciation outgo, pure operating expenses. When the
expenses are so high, naturally the bottomlines would take a beating,
right? The lower income plus the higher expenses, altogether, have
depressed the bottomlines further. The company states that it is the
market leader in DTH services and holds a 65% market share, yet this
market share holds no relevance if it does not get translated into
profits.



The company launched at a time when it was all alone in the DTH market
and today it has to comprehend with competition from Tata Sky, which
is also making inroads and would surely capture some parts of Dish
TV's market share. People in India are still predominantly suing cable
TV and it will take some more time and lot more effort from the Govt
to ensure that everyone switches over to DTH services. As such, those
who have taken the services, complain about the higher costs, so to
capture more markets, most in the industry confer that costs will have
to come down further. And when Dish TV is unable to make profits at
these higher costs, how can higher volumes alone ensure better margins
in the future?



The company has signed up Shahrukh Khan now as their brand ambassador
in a bid to give a boost to their image and their sagging sales. Now,
how far Mr.Khan will be able to make an "Om Shanti Om" of Dish TV,
only time will tell.



For now, shareholders would do best to exit from Dish TV. Dish ko
switch karo!