Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hathway Cable and Datacom Ltd. Muted 3QF11 results
Quick Comment – What's new: Hathway has
announced consolidated 3QF11 PAT of -Rs1.4m vs
Rs117m in 2QF11 and our estimate of Rs145m.
EBITDA at Rs415m was 22% lower than our estimate
and 17% lower QoQ. Revenue was flat sequentially
while EBITDA margin slipped 389bps QoQ to 18% due
to reduced ARPU and increased costs. Paying
subscriber base has reached 1.8m vs our estimate of
1.98m at F11end.
Key Highlights from the conference call:
Hathway’s focus on digitization continues: The
company targets doubling the current 1.3m digital
subscriber base in F12. Key focus areas are Delhi and
Mumbai where the plan is to increase the digital
penetration from 13-18% to 80% by April 2012.
LCO acquisition targets curtailed: Subscriber
additions in 3QF11 were slower than earlier expectations
which have been the key reason for the disappointment.
In 9MF11 primary subscriber acquisitions were 0.14m
(over the F10 end figure of 0.53m) and by F11end it plans
to add another 40k. In F12 again the company targets
~0.2m additions which is substantially lower than the
company planned 2-3 quarters back. As the valuation
expectations of LCOs remain high we feel Hathway may
continue to face resistance on its original plan to grow via
LCO acquisitions.
ARPU falls with competition: ARPU in 3QF11 was
Rs181 vs Rs185 in 2QF11. Management believes that
markets like Delhi are witnessing intense competition
from DTH. Hathway targets to double broadband
EBITDA in F12 through launch of 5Mbps product.
We remain OW on Hathway since we feel it is likely to
gain from digitalization over the medium term and from
LCO acquisition over the longer term and due to our view
that the recent stock price fall has been unduly severe.
However, we acknowledge near term challenges with
competition and high resistance from LCOs.
Company Description
Hathway is India's largest MSO (multisystem operator) and a
leader in cable television and cable broadband service. It has a
reach of about 8 m subscriber homes (9% of the total cable
homes) and a strong track record of subscriber acquisitions. It is
also the largest cable broadband provider in India with 0.3 m
subscribers
India Media
Industry View: Attractive
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hathway Cable and Datacom Ltd. Muted 3QF11 results
Quick Comment – What's new: Hathway has
announced consolidated 3QF11 PAT of -Rs1.4m vs
Rs117m in 2QF11 and our estimate of Rs145m.
EBITDA at Rs415m was 22% lower than our estimate
and 17% lower QoQ. Revenue was flat sequentially
while EBITDA margin slipped 389bps QoQ to 18% due
to reduced ARPU and increased costs. Paying
subscriber base has reached 1.8m vs our estimate of
1.98m at F11end.
Key Highlights from the conference call:
Hathway’s focus on digitization continues: The
company targets doubling the current 1.3m digital
subscriber base in F12. Key focus areas are Delhi and
Mumbai where the plan is to increase the digital
penetration from 13-18% to 80% by April 2012.
LCO acquisition targets curtailed: Subscriber
additions in 3QF11 were slower than earlier expectations
which have been the key reason for the disappointment.
In 9MF11 primary subscriber acquisitions were 0.14m
(over the F10 end figure of 0.53m) and by F11end it plans
to add another 40k. In F12 again the company targets
~0.2m additions which is substantially lower than the
company planned 2-3 quarters back. As the valuation
expectations of LCOs remain high we feel Hathway may
continue to face resistance on its original plan to grow via
LCO acquisitions.
ARPU falls with competition: ARPU in 3QF11 was
Rs181 vs Rs185 in 2QF11. Management believes that
markets like Delhi are witnessing intense competition
from DTH. Hathway targets to double broadband
EBITDA in F12 through launch of 5Mbps product.
We remain OW on Hathway since we feel it is likely to
gain from digitalization over the medium term and from
LCO acquisition over the longer term and due to our view
that the recent stock price fall has been unduly severe.
However, we acknowledge near term challenges with
competition and high resistance from LCOs.
Company Description
Hathway is India's largest MSO (multisystem operator) and a
leader in cable television and cable broadband service. It has a
reach of about 8 m subscriber homes (9% of the total cable
homes) and a strong track record of subscriber acquisitions. It is
also the largest cable broadband provider in India with 0.3 m
subscribers
India Media
Industry View: Attractive
No comments:
Post a Comment