Reduce Hathway Cable; target of Rs 238: Emkay
Emkay Global Financial Services has recommended reduce rating on Hathway Cable and Datacom with a target price of Rs 238, in its November 19, 2013 research report.
November 20, 2013 / 17:17 IST
Emkay's research report on Hathway Cable and Datacom
Standalone revenue at Rs2203mn (+66 percent yoy and -5 percent qoq) and EBITDA at Rs384mn (+85 percent yoy and -50 percent qoq). Net loss at Rs444mn vis-à-vis PAT of Rs53mn in Q1FY14Subscription growth at 32 percent qoq to Rs685mn was led by improved collection in digitized markets. Activation revenue declined 65 percent qoq on account of lower box seedingDelays in CAF collection and implementation of package pricing due LCO resistance would continue to delay investment monetization in near-to-medium term.Outlook and valuation: "Although seeding of boxes has successfully been undertaken in Phase-I and II, consumer billing has been delayed because of continued resistance from LCOs. The company claims to have collected CAF (consumer acquisition form) for 95 percent of its subscribers in Delhi and Mumbai, which, it feels would not further delay consumer billing. We believe the continued resistance from LCOs would delay 100 percent consumer billing in the near term. Our estimate already discount consumer billing from FY15E. In our view, the stock price is already discounting the best case execution. ARPU growth in Phase-I and II, coupled with a betterthan-expected pick-up in broadband in the medium term, would be the key risk to our call. We remain cautious on the stock, and maintain a REDUCE rating with a target price of Rs 238," says Emkay Global Financial Services research.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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