ICICI Direct is bullish on GTPL Hathway recommended buy rating on the stock with a target price of Rs 150 in its research report dated October 14, 2020.
ICICI Direct's research report on GTPL Hathway
GTPL Hathway (GTPL) reported a strong Q2FY21 operating performance. Ex-EPC revenues were at Rs 497.3 crore, up 10.4% YoY. Revenues at Rs 575.6 crore, were down 7.1% YoY as EPC revenues for Q2FY21 were lower at Rs 78.3 crore due to disruptions. Subscription and broadband revenues were at Rs 267.7 crore and Rs 67 crore, respectively. Reported EBITDA increased 8.7% YoY to Rs 129.9 crore. EBITDA margins at 22.6%, were up 328 bps YoY as Q2FY20 had higher proportion of EPC revenue. Core EBITDA was up 15% YoY to Rs 124.3 crore with margins at 25%, up 100 bps YoY. PAT at Rs 45.1 crore, was up 56.3% YoY.
GTPL’s operating performance continues to remain strong, especially in broadband segment, which reported solid traction. We remain constructive on the company given the superior financial metric vis-à-vis peer amid leadership in key markets. The company had indicated to be a net debt free company by end of FY21E and expansion in newer markets with stronghold in Gujarat provides growth opportunities. We maintain our BUY rating and value it at Rs 150/share, implying target multiple of 9x FY22E core earnings.
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