GTPL - GTPL Hathway Limited Share Price

The management of GTPL Hathway outlined a cautiously optimistic outlook, emphasizing growth in both cable TV and broadband segments. Key points include:

1. Strategic Focus:

• Cable TV: Maintained leadership as India's largest MSO with 9.6M digital cable subscribers (8.9M paying). Focus on enhancing customer experience and expanding reach via new markets.
• Broadband: Active subscribers reached 1.045M (up 2% YoY), with ARPU rising to Rs.465. Homepass increased to 5.95M (75% FTTX-ready). Plans to leverage partnerships with LCOs/B2B partners for deeper penetration.

2. Growth Drivers:

• HITS License: Awarded a 10-year HITS license to improve cost efficiency and scalability in content distribution.
• Expansion: Targeting organic/inorganic growth in new states to widen addressable markets.

3. Financial Targets:

• Revenue/EBITDA: Aiming for 18% revenue CAGR and 9% EBITDA CAGR historically. FY25 consolidated revenue grew 8% YoY to Rs.35,072M; operating EBITDA margin at 22%.
• Profitability Challenges: Subscription revenue dipped due to competitive pricing in new markets, while higher depreciation/finance costs impacted net profit.

4. Market Dynamics:

• Competition: Addressed challenges from telcos/OTT but highlighted post-IPL subscriber recovery and stabilizing churn.
• Govt Initiatives: Participation in BharatNet (awaiting APO for Haryana/North-East projects) to bolster broadband infrastructure.

5. Technology: Prioritized FTTH for long-term growth, citing data demand and reliability over wireless alternatives.

Dividend: Recommended 20% dividend (Rs.2/share) for FY25, continuing consistent payout policy.

Management remains focused on operational efficiency, subscriber retention, and leveraging infrastructure to capitalize on India's digital growth.

Question 1: Could you comment on the recent ongoing developments regarding the National Broadband Mission 2.0 (BharatNet project)?

Answer: GTPL participated in the BharatNet project as part of a consortium with LC Infra and expects to secure L1 status (lowest bidder) for Haryana and Northeast regions within 30"“45 days. The initiative aligns with government efforts to enhance broadband infrastructure, which will benefit GTPL's expansion through third-party and self-developed infrastructure.

Question 2: What is the revenue and margin guidance for FY26?

Answer: The company aims to achieve an 18% revenue CAGR and 9% EBITDA CAGR, in line with historical performance. Operational EBITDA margins are targeted to remain stable at 22"“23%, driven by subscriber growth in cable TV and broadband, deeper market penetration, and operational efficiencies.

Question 3: Were you able to pass on recent broadcaster price hikes to customers?

Answer: GTPL absorbed most cost increases through negotiations with LCOs (Local Cable Operators) and marginally adjusted customer pricing. No significant subscriber churn was observed, with growth rebounding post-IPL and Ramadan.

Question 4: Why did cable TV subscriber growth slow in FY25?

Answer: Higher industry churn due to competition from OTT platforms, telcos, and regional content providers impacted growth. Subscriber additions recovered in Q4, and FY26 targets include 0.5 million additions as markets stabilize.

Question 5: How does HITS broadcasting differ from Starlink's services?

Answer: HITS focuses on TV broadcasting via satellite for B2B distribution, while Starlink provides satellite-based B2C internet. HITS enhances cost efficiency and reach for cable TV, complementing GTPL's existing infrastructure.

Question 6: What caused the decline in FY25 profitability (PBT)?

Answer: Lower subscription revenue (INR 28 crore decline), higher depreciation (INR 31 crore), and finance costs impacted profits. Management aims to offset this through higher subscriber additions and operational efficiency in FY26.

Question 7: How will government broadband initiatives impact expansion?

Answer: GTPL plans to leverage BharatNet and state-led fiber projects (e.g., Gujarat's GFGNL) for last-mile connectivity. Capex will focus on last-mile infrastructure, with minimal replacement costs due to durable fiber networks.

Question 8: How do you enter new states without existing LCO networks?

Answer: GTPL operates in 26 states via DAS (Digital Addressable System) and offers competitive pricing/schemes to attract subscribers in new markets, gradually aligning ARPU with national averages.

Question 9: Why did subscription income decline despite subscriber growth?

Answer: Temporary churn in Q2"“Q3 FY25 due to competitive pressures reduced paying subscribers. Recovery began in Q4, with FY26 targeting higher additions and stabilized revenue.

Question 10: How does higher data consumption affect costs?

Answer: Increased data usage (396 GB/month) has minimal cost impact due to caching, pairing technologies, and scalable infrastructure. Margins remain stable despite rising consumption.