Digitization- A game changer for TV18?

Stock Opportunities
21

You are most welcome Zulfiqar :slight_smile:

22

Hi Raghunath,

Thanks for providing so much of details. It has been quite helpful in understanding this tough sector.

Have initiated some positions in TV Today to keep a track and get better understanding.

Ayush

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Hi,

Can the experts throw some light on why a DTH player like Dish TV has underperformed cable players like Hathway / Den by such a huge margin post the start of digitization process? despite being one of the top DTH players.

Thanks!

-Niranjan

Disc: I own dish tv

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Niranjan,

My understanding is that end customer will not mind DTH or cable if there is no difference in the product

Compulsory digitisation implies cost / service / flexibility of menu is similar in both DTH and Cable. Why would a cable user shift to DTH if he is getting the same thing from his digitised Cable connection? Inertia

Game for DTH players is to convert as many customers before compulsory digitisation.

DTH players have accumulated huge losses so far to acquire customers

Regards

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Conference Call OfHathway Cable and Datacom-By Capital Market.

  • The company's standalone net sales for Q3 FY13 was up by 21% to Rs 152.97 crore while net loss declined by 59% to Rs 7.42 crore on Y-o-Y basis. The top-line rise was due to higher set top box activation revenue. The company has seeded ~0.73mn boxes in Q3.
  • The activation revenue for Q3 was at Rs 33 crore.
  • Q3 reflects the full cost of content for Phase I and unlikely to see further increases.
  • The consolidated EBIDTA for Q3 is around Rs 50 crore.
  • The company has 0.4mn boxes in inventory and has already entered into contracts with vendors for additional 3.5mn boxes.
  • The company has already seeded more than 2mn boxes in the 3 metros of Mumbai, Delhi and Kolkata. It has recently launched operations in Kolkata city and now has presence both directly and through JV in the city.
  • The company's digital subscriber base stands at ~3.5mn out of which 2.9mn are paying subscribers.
  • The company has around 15000 HD subscribers.
  • The company enjoys numero uno status in 11 of the 38 Phase 2 cities and has a presence in 25 cities. The company is targeting 4.0 - 4.5mn subscribers in Phase 2. It has put 1.5mn boxes in Phase 2 cities.
  • The company has started raising provisional invoices to the LCOs on a net basis (excluding LCO's revenue share). The company has raised invoices to LCOs based on mid package of Rs 220 ARPU, net collections from LCO is much lower and likely to improve by Feb. - March month. Direct billing to customers is likely to start from Q1 FY14.
  • The mgmt expects ARPU to reach Rs 400 over period of time.
  • The average share of LCO is around 35% - 41% in across the country.
  • The company has bought out the remaining stake in one of its largest JV with Bhaskar group. JV with Bhaskar had nearly 0.5mn subscribers and is a dominant player in MP, Chattisgarh, Rajasthan.
  • On the content cost, the mgmt said that most of them have been concluded with broadcasters. Most of them are on fixed basis. For Phase 2 cities, the company has to make new contract.
  • The company requires around Rs 300 crore for Phase 2.
  • The gross debt stands at Rs 650 crore (consolidated) and Rs 490 crore (standalone). Cash on books is at Rs 58 crore (consolidated) and Rs 27 crore (standalone). The debt is expected to go up around Rs 300 â 350 crore.
  • The company's strategy is to have as wide market as possible.
  • The company has more than 4 lakh broadband subscribers. It is looking at new technologies in this field.
  • The mgmt said it doesn't see any substantial decline in carriage fee, as even though carriage fee may have come down at individual broadcaster level, however due to large number of channels capacity, it can be collected from large number of broadcasters.

1 Like
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TV 18 stock has tanked by over 10% today. There is market rumour that RJ might be exiting the stock. Anybody got any news?

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even sun tv corrected a lot since last week

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The thread is named well…a game changer :slight_smile:

~Supratik

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The game changers like Tv18, arshiya, FT, MCx are good for big boys and not for small investors like us. We should stick to our Mayurs, Pages, Ajantas…

:))

~Supratik

1 Like
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Multibeggar

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Was this a taunt or sarcasm? Don’t you think it’s a little premature to make a comment like this?

Multibeggar

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It’s nothing I feel there is more downside to it . At last what will matter is earnings you think they can earn I think they cannot . Just a difference of opinions .

Sorry if it offended you I did not mean to do that

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I believe most of the RJ stocks are short today…look at Anantraj, DB…I didnt know Anantraj was in RJ’s portfolio…doscovered today.

~Supratik

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There was not any fundamental reason for the fall today. RJs exit from this counter has resulted in this. Frankly his entry and exit in any stocks does not change any fundamentals…many a time he has made an entry and the stock has tanked…db realty is one such example…I can justify why there is good chance of hike in earnings…Expect the same logic from your side and then this comment will be fine with me…

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It all boils down to PETER LYNCH’s maxim

BEWARE OF THE NEXT BIG THING.

the title of the thread also should have rung a warning bell – game changer.

For every bubble that is there there is a pin waiting to prick it.

2 Likes
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excellently put, worst corporate governence seen in group

**
**

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This one is from Safir Sir’s blog :

Tv 18 and den are in fact the easiest stocks to understand. Take a monthly cable bill of 200 bucks. Say 8 go to Tv 18 for all its channels. That means a potential of 8 x. 10 cr TV sets (many households have 2 to 3 connections) or 80 crs a month as collection. Over just one year thatâs 960 crs. Add the money saved as loading charges that were previously paid and add money saved on interest as co has reduced debt significantly. Numbers talk. Same for den. I suggest one reads the cable amendment act to see what a positive black swan this is.

Hitesh Sir, I still think there is a lot of change expected due to cable digitisation. Respect your comments a lot. Would request you to think on these lines

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ashwini damani

I think digitisation might benefit some companies from the space. Some part of that euphoria has played out also.

My issue was about a lot of guys getting bullish on the next big theme. Even on cnbc I could see a lot of celebrated guests coming and being extremely bullish on the theme. Nothing wrong with being bullish but one also needs to look at the inverted image and see what could go wrong. I havent yet found anybody raising concerns about sector or the stocks.

Plus there are very few companies with a dominating presence and those that are there like tv 18 etc suffer from poor balance sheets and not so great managements.

I am usually very sceptical about the next big theme or stock and have often missed a few multibaggers as well e.g wockhardt (excel was bullish right from beginning -aroud 300-400 levels), strides arcolabs, la opala rg to name a few.

1 Like
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This is precisely the type of mental model, which differentiate Hitesh bhai from rest of the crowd. Loved this skepticism of next big thing. Have read something in similar line in one of the book, forgot which book it was.

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Was this line present in 'One up on the wall street ’ where he asks us to be cautious of a company which can be the next IBM…both the original entity and the imitator loses it’s value…

Yes even following Hitesh Ji closely I understand that corporate governance,zero or very less debt,strong balance sheet should be the foremost criteria for selecting a stock which will prevent capital erosion…Well i must confess that investing in last one and half years in the market that good business model does not hold great value in case of liquidity crunch,poor sales etc.

As Hitesh Ji has already said that following this strategy might lead to losing few multibagger opportunities but capital protection is taken care of…In retrospect I feel that I should have given priority to the main factors instead of being so fascinated with the theme/concept…

ashwini damani

I think digitisation might benefit some companies from the space. Some part of that euphoria has played out also.

My issue was about a lot of guys getting bullish on the next big theme. Even on cnbc I could see a lot of celebrated guests coming and being extremely bullish on the theme. Nothing wrong with being bullish but one also needs to look at the inverted image and see what could go wrong. I havent yet found anybody raising concerns about sector or the stocks.

Plus there are very few companies with a dominating presence and those that are there like tv 18 etc suffer from poor balance sheets and not so great managements.

I am usually very sceptical about the next big theme or stock and have often missed a few multibaggers as well e.g wockhardt (excel was bullish right from beginning -aroud 300-400 levels), strides arcolabs, la opala rg to name a few.