MOSL: Morning India (25/September/17)-1. Dish TV (Cost synergies not fully factored in stock price)- 2. Hindustan Unilever- 3. Cement

​MOrning India (25/September/17): 1. Dish TV (Cost synergies not fully factored in stock price); 2. Hindustan Unilever; 3. Cement

Today’s top research idea

• Dish TV India: Cost synergies not fully factored in stock price; Expect healthy EBITDA growth for merged entity in FY19
  
• Videocon D2H's merger should drive synergies of INR2.4b/INR4b in FY19/20 (management expects synergies of INR5.1b in FY19), implying combined EBITDA of INR26.8b/INR31.9b in FY19/20.
  
• DITV's ARPU should gradually recover, as (a) the effects of demonetization wane, (b) HD contribution rises, (c) GST leads to better tax compliance by LCOs and (d) competitive intensity diminishes with consolidation.
  
• DD Freedish remains a near-term risk, but the FTA market may not favorably offset broadcaster's loss of Pay TV subscription revenue. Thus, the risk of DD Freedish may subside beyond 1-2 years.
  
• We expect DTH operators to be insulated from RJio's wireline launch, given it will be more urban-specific with slow scalability and high ARPU offerings.
  
• DITV is trading at EV of 5.8x FY19E EBITDA, including merger synergies. Buy with a TP of INR106 (8x FY19E EBITDA of INR26.8b, incl. synergies).
  

Piping hot news

Opec, Russia hold steady on cuts as oil market improves

• The Organization of Petroleum Exporting Countries (Opec) and Russia said they were about halfway toward clearing a global oil glut and urged fellow producers to stay focused and finish the job, while stopping short of additional action to reassure a jittery market.