Joined: 01/Jan/2006
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Posted: 25/Feb/2008 at 1:10pm
This time Subhas Chandra will insist on money first and talk later principle. This was really stunning
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Joined: 29/Dec/2007
Location: India
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Posts: 1283
Posted: 26/Feb/2008 at 9:08am
Dish TV : Bland fare
The lack of funds could slow down subscriber acquisition
With Indivision India Partners unwilling to subscribe to shares of Dish TV at Rs 100 per share, the DTH service provider faces a serious setback.
The proposed infusion of Rs 250 crore would have come in handy because capital is key in this industry, where content needs to be acquired and set top boxes subsidised.
Dish TV requires about Rs1,500 crore for capital expenditure to fight the intensifying competition in the DTH space; not only are new deep-pocketed players entering the arena, they could come in with more attractively priced packages.
Sun has started rolling out its DTH service in the four southern states, Reliance is in the process of doing a soft launch and Bharti’s service too will soon be available in several states.
Under the circumstances, the cost of acquiring customers is bound to go up; currently Dish TV spends about Rs 1880 for signing up a customer and this could go up to as much as Rs 2500.
Such an increase in the costs will put some pressure on the balance sheet. For FY08, the company is expected to post losses of around Rs 380 crore on revenues of Rs 430 crore. In FY09, while revenues could touch Rs 900 crore, the losses could go up to Rs 400 crore.
Without capital in a competitive environment, Dish TV runs the risk of losing market share. In the December 2007 quarter, its share of the incremental growth had fallen to 43 per cent from 75 per cent in Fy07 and it may have fallen further since then with the entry of Sun into the market.
Even today, Dish TV commands a market share of 64 per cent with a subscriber base of 2.8 million. But even if the base increases to around 4.5 million subscribers by 2010, its share of the total estimated market of 14 million subscribers, is likely to fall to about 30 per cent.
The stock has lost about 40 per cent since January this year when it was trading at levels of Rs 100. At the current price of Rs 62, the risks far outweigh the rewards.
Joined: 15/Aug/2007
Location: India
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Posted: 26/Feb/2008 at 11:07am
Fasten your seat belts ladies and gentlemen; we’re in for a turbulent ride!
Let’s just hope the good prof. mankekar doesn’t follow his friend KBiyani and pull out. Though I doubt very much he will!
However, I disagree with BS regarding the risk reward ratio. At 60, the risks are considerably softened and in the long term the rewards far outweigh the risks.
The question that needs to be addressed is time costs. Can our money be put to better use for the next 1-2yrs, than having it locked up in dish. Because the truth is in the absence of earnings – which in the end is the anchor for every stock, Dish will move like a yo-yo.
So you better have a stomach for it!
For my part I’m sticking with dish. For no other reason but that it falls within my very small circle of competence.
The way I see it, better the known devil, than the unknown one
i doubt it ...coz i checked with one of the pupils of Prof and he s still bullish .But i dont think coz somoeone is buying u shud hold or sell when he sells out.. again be prepared for the worst.
Joined: 01/Jan/2006
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Posted: 26/Feb/2008 at 11:18am
The question that needs to be addressed is time costs. Can our money be put to better use for the next 1-2yrs, than having it locked up in dish
That is the only concern!
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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With Indivision India Partners unwilling to subscribe to shares of Dish TV at Rs 100 per share, the DTH service provider faces a serious setback. 
