Hathway Cable & Datacom Ltd

Hathway Cable & Datacom Ltd
Broadcasting & Cable TV
FV – Rs 2; 52wks H/L –48/24; TTQ – 1.18 Lacs; CMP – Rs 34 (As On November 23rd 2016; 12.30);                            

      Market Cap – Rs 2832 Crs

Consolidated Financials and Valuations for FY16 (Amt in Rs Crs unless specified)


Equity Capital
Net worth		 Long Term Debt
Total
Sales		 PAT
BV
(Rs)
EPS (Rs)
P/E
Industry P/E
P/BV
Promoter’s
Stake		 Beta
166.1 1047 839 2105 -163.13 13 -1.96 – 70.23 2.62 43.48 0.83

 

Standalone Financials and Valuations for Q1 FY17


Equity Capital
Net worth		 Long Term Debt
Total
Sales		 PAT
BV
(Rs)
TTM EPS (Rs)
TTM P/E
Industry P/E
P/BV
Promoter’s
Stake		 Beta
166.1 1047 839 302 -53.2 13 -0.64 – 70.23 2.62 43.48 0.83

*On 6/1/2015 there was stock split from Rs.10 to Rs.2 per share

Valuation Parameters:

  1. Long Term Debt to Equity – 0.8
  2. ROE % – Nil
  3. Market Cap/Sales – 1.35

India’s largest cable broadband service provider with approximately 3.3 million two-way broadband homes passes and more than 40% share of the total cable broadband market in India.

  • The company has crossed 7 Lakhs Broadband subscribers.
  • Extensive network connecting 12.3 million CATV households and 10.6 million digital cable subscribers.
  • More than 10.6 million Set-Top Boxes (STBs) seeded across the country.

Company Updates:

  • For the quarter 0.6 Mn STBs deployed at consolidated level (0.2 Mn STBs at Standalone) total DAS III subscribers base reaches 4.7Mn.
  • CATV subscription revenue for Standalone stood at Rs. 117.7 Cr (YoY + 12%)
  • Standalone ARPU for Phase I and II is Rs. 105 and Rs. 86 respectively.
  • Supreme Court has moved all stay petition granting extension for implementation of DAS III to Delhi High Court; the next hearing is schedule on 6 & 7 th September 2016.
  • Due to pending court decision, DAS III standalone 2.2 Mn + subscribers monetisation stood at Rs 25 – 30 per subscriber against overall content cost Rs 30 per Subscriber and other overhead Rs 20 Per subscriber.
  • A dedicated 24/7 spiritual channel christened “Divine” launched on 1 st Sept 2016.
  • 50% of standalone phase I & II customer base has moved to Hathway Connect.
  • Launch of Hathway Connect Mobile APP, enables LCOs to manage their business from anywhere, this shall speedup servicing of subscribers.

 

Financial (Rs.Crs) Q1 FY17 Q1 FY16 QoQ %
Income      
Subscription CATV 107.7 90.7 19
Subscription Broadband 104.6 65.1 61
Placement 66.3 83.8 -21
Activation 18.7 14.5 29
Other Operating Income 4.7 4.6 3
Total Income 302.1 258.7 17
Expenditure      
Purchase of stock-in-trade  –  – 0
Employee Cost 22.7 17.6 29
Pay Channel Cost 102 78.6 30
Service Charges 34.6 25.9 33
Other Expenses 98.2 95.5 18
Total Expenditure 257.6 217.6 18
PAT -53.2 -37.4 -42

 

Overview:

  • Hathway Bhawani Cabletel and Datacom Ltd is engaged in distribution of television channels through analog and digital cable distribution network and Internet services through cable.
  • The Company offers cable television services and broadband services.
  • It provides cable television services across over 140 cities and towns, and high-speed cable broadband services in approximately 21 cities.
  • The Company’s digital cable television products include High Definition Personal Video Recorder (HD PVR), Hathway HD and Hathway Standard definition (SD).
  • The Company offers a range of kids channels, infotainment channels, English and business news channels, English entertainment and music channels, English movies channels and sports channels. It provides home broadband and business broadband.
  • Its Fiber Broadband plans for Home Users include HD Elite, HD3 Stream50, HD Bliss, HD4 Stream50 and Infinite 2Mbps Unlimited.
  • It offers fiber Internet services and multi office connectivity for its clients.

 

Management:

  • Mr. Sridhar Gorthi – Chairman
  • Mr. Jagdishkumar G. Pillai – MD & CEO

The Equity Capital is @ Rs 166.1 Crs consisting of 830494500 equity Shares of FV Rs 2 currently held 

None Of the Promoter’s Holding is pledged.

 

Major Non – Promoter Holdings:

Sr.No Non – Promoters No. of shares held % of shares held
1 Reliance Capital Trustee Co. Ltd A/C Relianceequity Opportunities Fund 33960053 4.09
2 American Funds Insurance Series Global Small Capitalization Fund 11750000 1.41
3 Goldman Sachs (Singapore) Pte 18604392 2.24
4 East Bridge Capital Master Fund Limited 22467400 2.71
5 Morgan Stanley Asia (Singapore) Pte. 25316227 3.05
6 Macquarie Bank Limited 25448913 3.06
7 Clsa Global Markets Pte. Ltd. 35204687 4.24
8 Smallcap World Fund, Inc 35876000 4.32
9 P6 Mauritius India Holding Limited 70717760 8.52
10 Satish B Raheja 11146880 1.34
11 P6 Aisa Holding Investments Iv (Mauritius) Limited 19350000 2.33
12 Infrastructure India Holdings Fund Llc 27843045 3.35
13 P5 Asia Holding Investments (Mauritius) Limited 52783220 6.36

 

 

Consolidated Financial Trends (In Rs. Crs) :

Particulars FY16 FY15 FY14 FY13 FY12 FY11
Equity Paid Up 166.1 166.1 152 143 143 143
Networth 1047 1044 959 822 803 852
Total Debt 1532 1013 1121 745 291 256
Net Sales 2105 1859 1594 1148 1029 908
Other Income 24 27 11 16 16 25
PAT -163.13 -180.46 -111.11 15.7 -49.18 -31.27
Book Value (Rs) 13 13 13 11 11 12
EPS (Rs) -1.96 -2.17 -1.46 0.22 -0.69 -0.44

 

In FY14 678495600 equity shares were issued at a face value of Rs.10 per share.

CATV and Broadband revenue have increased by 13% and 61% respectively, on YoY basis

 

Risks:

  • Stay orders of various High Courts has impacted seeding plan in DAS III areas.
  • Further extension or refusal to vacate the stay will create hurdles in the expansion plan.
  • The competition in broadband space may intensify over time due to existing and new players which may impact ARPUs and start a price war.