Buy Hathway Cable; target of Rs 320: ICICIdirect

ICICIdirect.com's report on Hathway Cable and Datacom

"Hathway Cable’s revenue came in at Rs 249.6 crore, lower than our estimate of Rs 286.0 crore. The EBITDA came in at Rs 43.9 crore, primarily on account of lower programming cost. EBITDA margin stood at 17.6%. Net loss was at Rs 0.9 crore aided by exceptional gain of Rs 28.9 crore on account of a change in depreciation method. Adjusting for this, net loss was Rs 29.4 crore, in line with our estimate of Rs 29.3 crore."

"The overall opportunity from digitisation remains huge, even though its monetisation will take more time. Moreover, the DOCSIS 3 broadband can lead to faster growth in broadband revenue. We continue to rate the stock as BUY but reduce our target price owing to further perceivable delays in digitisation. Using DCF we value the stock at Rs 320", says ICICIdirect.com research report.

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