Edelweiss' research report on Hathway Cable & Datacom
Carriage and placement revenue jumped 7.6% QoQ aided by Hathway’s initiatives. Pay channel cost remained flattish and rose merely 0.9% QoQ. Employee cost was under control and fell 0.9% QoQ. Hathway seeded 0.4mn boxes, takings total digital subscriber base to 12.2mn.
OutlookAmong MSOs, Hathway is well placed to capitalise on the digitisation opportunity. Hathway Connect will help Phase I and II ARPU growth. Monetising Phase III areas is a key monitorable. We like the company’s strategy of increasing investment in the highmargin broadband business. We roll forward to FY19E and maintain ’BUY/SP’ with target price of INR45 (INR 41 earlier). At CMP, the stock is trading at 11.3x FY18E and 9.8x FY19E EV/EBITDA.
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