MUMBAI: Indian pay TV platform and DTH operator Videocon d2h is slowly but surely getting its act together. At least if one goes by the financials for the quarter ended 30 September 2015 it has filed with Securities Exchange Commission in the US. The company is listed on the US Nasdaq.

It has announced lower net losses, higher subscription and activation revenues, higher  EBITDA,  and an increase in both gross and net subscribers in the latest quarter as compared to the previous fiscal quarter and Q1 FY 2016.

Net loss for the second quarter of the 2016 fiscal year at Rs 24.6 crore is a 59.9 per cent improvement over the net loss in the second quarter of the 2015 fiscal year which stood at Rs 61.4 core. It is, however,  marginally higher than the Rs 24.6 crore loss it suffered in Q1 FY 2016.

 It has reported a sales growth in both subscription and activation revenue and revenue from operations to Rs 629 crore (Rs 505 crore previous fiscal quarter – a growth of 24.6 per cent) and Rs 690 crore (Rs 507.30 crore  in Q2 FY 2016 – a growth of 20.3 per cent growth) respectively.  The comparitive Q1 FY 2016 figures for subscription and activation revenue  and overall revenues for Q1 FY 2016 were Rs 599.61 crore and 662.83 crore.

The company notched up higher net subscribers (10.84 million in Q2 FY 2016 vs 9.46 million in Q2 FY 2015).  Average revenue per user (ARPU) growth  was higher at Rs 205 in Q2 2016 vs Rs 190 in Q2 FY 2015 but stagnated when compared to Rs 205.30 in Q1 FY 2016.

It added 0.20 million net subscribers in this quarter, while adding 0.57 million gross subscribers to end Q2 FY 2016 with 14.27 million gross subscribers.

As a comparitive, the  DTH service provider addded 0.61 million gross subscribers and 0.46 lakh net subscribers in Q1-FY 2016.

Churn was higher in Q2 FY 2016 at 1.19 per cent as against 0.85 per cent in the previous corresponding fiscal quarter. 

The company’s adjusted EBITDA has also improved 32.3 per cent to Rs 191 crore in the quarter ended 30 September 2015 as against Rs 145 crore for Q2 30 September 2014. This is a 2.50 per cent rise in adjusted EBITDA margin to 27.7 per cent in the latest quarter, despite significant increases in content costs as a percentage of revenue. Videocon d2h has clarified that the adjusted EBITDA is calculated after accounting for impact of its ESOP Plan 2014 which amounted to Rs 2.94 crore. The company’s EBIDTA in Q1-2016 was  Rs 187.43 crore (28.3 per cent margin).

Videocon d2h says it began operating under new long term content agreements in the second half of the 2015 fiscal year. Content costs as a percentage of revenue in Q2 FY 2016 stood at 38.1 per as against 34.8 per cent in Q2 FY 2015.  Comparitively, content cost as a percentage of revenue in Q1 FY 2016 was  37 per cent. 

Subscriber acquisition costs in the form of hardware subsidies were Rs 1,775 per subscriber during the second quarter of the 2016 fiscal year as against Rs 1,793 in Q1 FY 2016.

Commenting on the results, 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 4 High Definition channels. We have recently launched two proprietary services, namely d2h Hollywood HD and Darshan. With more than 50 million eye balls we also continue to gain traction on advertising revenue with marque advertisers coming on our platform."

Speaking on the near term subscriber growth outlook Videocon d2h CEO Anil Khera said,  "We estimate around 50 million television homes come under Phase III digitization, of which 24-25 million television homes are already on the digital platform. Thus, the target market under Phase III digitization is the remaining 25-26 million television homes that are currently on analog cable."

The company has also stated that its estimated market share stands at 21 per cent and it is among India’s fastest growing pay TV platforms.

The Videocon d2h stock was trading at around $9.49  on Nasdaq at the time of writing as against $12.05 at the beginning of 2015.