Recent Price Movement and Market Context
On the day the new low was recorded, Dish TV India’s stock price fell by 0.69%, aligning with the sector’s overall performance. The stock has experienced a consecutive four-day decline, resulting in a cumulative loss of 4.64% over this period. Notably, the share price is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum.
In contrast, the broader market index, Sensex, opened flat but later declined by 505.97 points, or 0.65%, closing at 81,714.51. While the Sensex is trading below its 50-day moving average, the 50DMA remains above the 200DMA, indicating mixed technical signals at the market level. Sector-wise, the S&P Bse Oil & Gas index hit a new 52-week high on the same day, highlighting divergent trends within the market.
Long-Term Performance and Relative Comparison
Over the past year, Dish TV India Ltd’s stock has delivered a negative return of 56.14%, significantly underperforming the Sensex, which posted a positive 9.48% return during the same period. The stock’s 52-week high was Rs.6.90, underscoring the steep decline to the current low of Rs.2.86. This underperformance extends beyond the last year, with the stock lagging behind the BSE500 index over the last three years, one year, and three months, reflecting persistent challenges in maintaining shareholder value.
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Financial Health and Profitability Metrics
Dish TV India Ltd’s financial fundamentals continue to reflect considerable strain. The company holds a negative book value, indicating that its liabilities exceed its assets, which contributes to a weak long-term fundamental strength assessment. This is further corroborated by the company’s poor ability to service debt, with an average EBIT to interest ratio of just 1.17, signalling limited earnings before interest and taxes relative to interest obligations.
Quarterly financial results have been negative for ten consecutive quarters, with the latest quarter reporting a net sales figure of Rs.299.05 crores, down 10.5% compared to the previous four-quarter average. The company’s PBDIT (Profit Before Depreciation, Interest, and Taxes) for the quarter was a loss of Rs.41.54 crores, marking the lowest level recorded. Additionally, the operating profit to interest ratio for the quarter was negative at -0.61 times, underscoring the challenges in covering interest expenses from operating profits.
Valuation and Risk Considerations
The stock is currently trading at valuations that are considered risky relative to its historical averages. Despite the negative price performance of -56.14% over the past year, the company’s profits have paradoxically increased by 70.1% during the same timeframe. This divergence suggests that market sentiment and valuation metrics are not fully aligned with recent profit trends, possibly reflecting concerns about sustainability and balance sheet strength.
Institutional investor participation has also declined, with a reduction of 1.02% in their stake over the previous quarter. Currently, institutional investors hold 12.67% of the company’s shares. Given their typically rigorous fundamental analysis capabilities, this decrease may indicate a cautious stance on the stock’s prospects.
Sector and Market Positioning
Within the Media & Entertainment sector, Dish TV India Ltd’s performance contrasts with some peers that have maintained or improved valuations. The company’s Mojo Score stands at 1.0, with a Mojo Grade of Strong Sell as of 4 March 2024, an upgrade from the previous Sell rating. This grading reflects the company’s ongoing challenges and the market’s cautious outlook.
Market capitalisation grading is at 4, indicating a relatively modest size within the sector. The stock’s recent price action and fundamental metrics suggest that it remains under pressure relative to sector benchmarks and broader market indices.
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Summary of Key Metrics
To summarise, Dish TV India Ltd’s stock has reached a new 52-week low of Rs.2.86, reflecting a sustained decline over recent months and years. The company’s financial indicators, including negative book value, weak EBIT to interest coverage, and consecutive quarterly losses, highlight ongoing difficulties. The stock’s underperformance relative to the Sensex and BSE500 indices further emphasises the challenges faced.
Institutional investor reduction in holdings and the stock’s trading below all major moving averages reinforce the cautious market stance. While the company’s profits have shown some improvement, the overall valuation and fundamental outlook remain subdued as of the latest data.
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