Hathway IPO price does not leave much of upside: Sharekhan

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Sharekhan has come out with a research report on Hathway Cable and Datacom (HCDL) IPO. The research firm says, the issue price does not leave much of an upside.

The report says, "We believe, with the acquisition-led strategy aided by digitisation initiatives in the cable TV services and the brisk pace of subscriber addition in the broadband services, HCDL's top line is likely to grow at a healthy pace and the profitability is expected to improve substantially in the coming years."

"However we believe at 24.1x and 26.3x FY2010E enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA; EBIDTA annualised for M9FY2010) at the lower and the upper end of the price band respectively the issue price factors in the entire expected improvement in the operating matrix and does not leave much of an upside," according to Sharekhan report.

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To read the full report click on the attachment