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Morgan Stanley sees 18% upside in Hathway Cable on Cable TV biz, Reliance deal

Morgan Stanley expects Hathway Cable to hit a target price of Rs 36 over a period of one year, implying nearly 18 percent potential upside from Friday's trade.

November 19, 2018 / 10:50 AM IST
Hathway Cable & Datacom | Net sales on Mar 20: Rs 151 crore, Dec 19: Rs 143 crore, Sept 19: Rs 139 crore, Jun 19: Rs 134 crore. The stock price rises 41 percent in the last 1-year.

Hathway Cable & Datacom | Net sales on Mar 20: Rs 151 crore, Dec 19: Rs 143 crore, Sept 19: Rs 139 crore, Jun 19: Rs 134 crore. The stock price rises 41 percent in the last 1-year.

 
 
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Hathway Cable and Datacom shares gained as much as 1 percent in morning on Monday after global investment firm Morgan Stanley retained its overweight call on the stock.

The research house expects the stock to hit a target price of Rs 36 over a period of one year, implying nearly 18 percent potential upside from Friday's trade.

There are near-term headwinds but long-term tailwinds like cable television business and Reliance deal could support earnings, the brokerage house said.

It further said higher churn in the broadband business drove cuts to near-term EBITDA (earnings before interest, tax, depreciation and amortisation) forecast. "FY19/FY20/FY21 EBITDA estimate cut by 4 / 1 / 2 percent."

However, better monetisation in cable television business should help the performance and potential benefits from Reliance deal should improve performance, it said.

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Last month, Reliance Industries decided to take controlling stake in the cable TV distribution company.

Hathway Cable, on October 19, announced raising funds to the tune of Rs 2,940 crore through preferential allotment to Reliance Jio, the subsidiary of Mukesh Dhirubhai Ambani Group-led Reliance Industries.

At 10:28 hours IST, the stock was quoting at Rs 30.70, up Rs 0.15, or 0.49 percent on the BSE.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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first published: Nov 19, 2018 10:50 am

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