Thursday, June 23, 2011

Dish Buy on declines !

/photo.cms?msid=8900969Dish TV

An investor can expect spectacular returns, if he can accurately anticipate the improvements in fundamentals and spot stocks well before it turns around. Dish TV is a good candidate for that. Its consolidated loss came down to Rs 198 crore in 2010-11, compared to its consolidated net loss of Rs 262 crore in 2009-10 and Rs 481 crore in 2008-9. It was also able to show revenue growth of 32% (driven by strong subscriber additions) and 7% increase in blended ARPU in 2010-11.

The EBITDA margins were also up 680 bps YoY, driven by lower programming and content costs (36% of revenues versus 42.2% in 2009-10). Analysts expect Dish TV to generate free cash flows in 2011-12. "The business is breaking even and this along with the increase in subscriber base will lead to a sustainable profit in coming years," says Sandeep S Bharadwaj of Tower Capital

Our Recommendation :

The stock has risen sharply since last 3 months and is on a downward spiral. Look to buy around 60 levels for a target of 90 holding period of 3 months.

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