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Videocon d2h adds 0.2 mn net subs in Q2 FY16, operating profit at Rs 191 cr

MUMBAI: Videocon d2h has added 0.2
million net subscribers in the second
quarter of the fiscal, as against 0.46
million in the first quarter of the
financial year 2015–16.
The direct-to-home (DTH) operator’s
average revenue per subscriber (ARPU)
has remained flat at Rs 205, compared
to the first quarter of the fiscal.
However, compared to the
corresponding quarter of previous
fiscal, it has expanded by 7.9 per
The Nasdaq-listed company, which is
targeting higher subscriber additions
in the second half of the fiscal due to
the 31 December 2015 deadline of the
Phase III of digital addressable
system (DAS), has posted an operating
profit (adjusted EBITDA) of Rs 191.2
crore (Rs 1.91 billion) for the quarter
ended 30 September 2015.
In the trailing quarter (Q1FY16),
adjusted EBITDA stood at Rs 190.27
crore (Rs 1.90 billion), while in the
year-ago period (Q2 FY15) it was at
Rs 144.5 crore (Rs 1.44 billion).
The company clarified that Q2 FY16
adjusted EBITDA was calculated after
accounting for impact of employee
stock option plan in 2014, which
amounted to Rs 2.94 crore (Rs 29.44
Net loss for the quarter stood at Rs
24.6 crore (Rs 246 million), compared
to Rs 24.4 crore (Rs 244 million) in
the trailing quarter and Rs 61.4 crore
(Rs 614 million) in the year-ago
Revenue during the quarter under
review swelled to Rs 690.1 crore (Rs
6.90 billion), from Rs 662.8 crore (Rs
6.63 billion) in Q2 FY15 and Rs 573.4
crore (Rs 5.73 billion) in Q2 FY15.
Subscription and activation revenue
stood at Rs 629 crore (Rs 6.29
billion). EBITDA margin, meanwhile,
was at 27.7 per cent, compared to Rs
28.7 per cent in the trailing quarter
and 25.2 per cent in the year-ago
Expenses during the quarter stood at
Rs 650.7 crore (Rs 6.51 billion),
compared to Rs 618.1 crore (Rs 6.18
billion) in the trailing quarter and Rs
557.31 crore (Rs 5.57 billion) in the
earlier-year quarter.
Videocon d2h executive chairman
Saurabh Dhoot said, “I am happy to
share that we have achieved EBITDA
growth of 30.3 per cent in the first
half of the current fiscal as against
our guidance of 25–30 per cent
growth. We are on track to deliver
even stronger growth in the second
half of this year, in line with the
guidance shared earlier. During the
quarter, we focused on enhancing our
channel offering and added 14
standard definition and four high
definition channels. We have recently
launched two proprietary services,
namely d2h Hollywood HD and Darshan.
With more than 50 million eyeballs, we
also continue to gain traction on
advertising revenue with marque
advertisers coming on our platform.”
Videocon d2h CEO Anil Khera said, “We
estimate around 50 million television
homes come under Phase III
digitisation, of which 24–25 million
television homes are already on the
digital platform. Thus, the target
market under Phase III digitisation is
the remaining 25–26 million television
homes that are currently on analogue

Subscriber additions

The company has added 0.2 million net
subscribers (0.57 million gross) during
the quarter, taking its net subscriber
base to 10.84 million as of 30
September. The gross base is at 14.27
million subscribers.


While ARPU has seen a gradual
increase over several consecutive
quarters, at the end of Q2 FY16,
ARPU remained flat at Rs 205. In the
year-ago period, however, it was at
Rs 190.

Content cost

For Videocon d2h, the content cost
has seen increase during the quarter.
In the second quarter of the current
fiscal, content cost comprised 38.1
per cent of the total revenue. In the
trailing quarter, content cost
comprised 37 per cent of the revenue.
In the year-ago period, it was 34.8
per cent of the total revenue.
Videocon d2h began operating under
new long-term content agreements in
the second half of the 2015 fiscal
year, said the company.


One of the concerns for the DTH
operator could be a higher churn
during the quarter. Monthly churn was
at 1.19 per cent in the quarter, up
from 0.46 per cent in Q1 FY16. In the
year-ago period, churn was at 0.85
per cent per month.

Subscriber acquisition cost

Acquisition cost per subscriber
(hardware subsidy) stood at Rs 1755,
down from an average of Rs 1,793 in
Q1 FY16.


The company had gross debt of Rs
2,486 crore (Rs 24.86 billion) and
total cash and short-term
investments of Rs 875 crore (Rs 8.75
billion) as of 30 September 2015

Videocon d2h adds 0.2 mn net subs in Q2 FY16, operating profit at Rs 191 cr

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