Sell Dish TV advises Phani Sekhar

Sekhar told CNBC-TV18, “A lot will depend on the results of the Phase I digitisation which we will come to know over the next one or two months when we will actually have these Multi System Operators (MSO) collecting dues from the customers. There is a larger point with respect to Dish TV and that is 2013 is fundamentally different from 2005-06.”

He further said, “In earlier days if you were doing a large investment the market would give you a premium based on fancy numbers like subscriber additions and all. But in 2013 with competition from very strong incumbents I think this is the market that will soon run out patience with these kind of subscriber number additions and all. And it will start demanding real profitability and cash flow metrics and that is where I guess Dish TV will struggle for over the next two years, because now you will have Phase II digitisation followed probably by Phase III digitisation which means it will remain in continuous investment mode, continuously burning cash.”

“That is a big challenge for Dish TV. Since valuations are not very supportive if the investor is not a very long-term investor he/she can actually consider getting out of this stock.” Sekhar added.