Dish TV India jumped 9.95% to Rs 13.81 after the company reiterated its intention to repay all its debts as and when they become due in the future.
Dish TV India announced on Friday, 6 December 2019, that it received a communication about credit rating review of its banking facilities by Care Ratings. The rating agency has downgraded the short-term bank facilities rating to 'CARE D' from 'CARE A4+'.The agency in its rationale has taken into consideration the default by Dish TV India in payment of its short-term loan amounting to Rs 250 crore.
Following the development, Dish TV clarified that it has been drawing on its internal cash accruals to fund its capital expenditure for more than six quarters now. In addition, the company has also serviced its debt and interest obligations, on a consolidated level, to the tune of Rs 850 crore in the current fiscal. Debt and interest payment obligations falling due after the particular incident of non-service have also been fulfilled on time.
The company's deferral to service the loan amount is due to bunching of repayment obligations and utilization of funds for other business requirements including, both capital expenditure and payment of operating liabilities to broadcasters and suppliers. The default in debt repayment was thus a result of a temporary cash shortfall due to peak payment commitments to suppliers.
Dish TV India while being cautious about its cash expenditures also remains optimistic about improvement in its liquidity situation going forward. The company is in touch with its banking partners and hopes to get alternate credit facilities to finance its regular capex so as to normalize the utilization of its cash flow towards debt repayment.
Meanwhile, the S&P BSE Sensex was up 99 points or 0.25% to 40,544.51.
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In the past one month, shares of Dish TV India fell 7.43% to its current market price of Rs 13.81, underperforming the Nifty Media index's 4.02% fall in the same period.
On the technical front, the stock's RSI (relative strength index) stood at 48.567. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.
The stock was currently trading below its 50-day moving average (DMA) placed at Rs 15.08, as well as below its 200 DMA placed at Rs 26.98.
Dish TV India reported a consolidated net loss of Rs 91.36 crore in Q2 September 2019 as compared to consolidated net profit of Rs 25.49 crore in Q2 September 2018. The consolidated net sales tanked 44% to Rs 893.18 crore in Q2 September 2019 over Q2 September 2018.
Dish TV India is engaged in the business of direct-to-home (DTH) services.
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