Analysis: Hathway Cable and Datacom Limited

NSE:HATHWAY Entertainment & Media Market cap: ₹1.8K cr

Growth thesis

Hathway delivers broadband and cable TV services to 5.5 million home passes, prioritizing high-data (>80 GB/month) users through bundled FTTH, Pay TV, and IoT solutions. Broadband (HCDL) and Cable TV (HDPL) segments face stagnant ARPU despite 40-50 crore annual opex cuts and 500 crore net-debt reduction targets by FY20. Management’s 2018 guidance to lift Phase III/IV ARPU to 60/90 remains unmet (58/41 as of Q1 FY19), with broadband ARPU flat at 740 for eight quarters. Promoter infusions (250 crore by FY20) and automation-driven margin expansion (43% EBITDA maintained) offset ARPU declines, but delayed monetization of existing home passes and reliance on external funding risk long-term growth. Key execution risks include achieving 30-month payback on capex and sustaining debt reduction amid content cost inflation.

Why is Hathway Cable and Datacom Limited stock rising?

New strategic framework shifts focus to heavy data users (>80 GB/month) through bundled FTTH, Pay TV, OTT and IOT services, following a J-curve growth model.
No further home pass expansion for FY19; entire focus on acquiring high-usage customers within existing 5.5 million home passes.
Targeting Rs. 40 crore opex reduction in FY19 through automation, process re-engineering and bandwidth cost optimisation.
Promoters to infuse Rs. 150 crores over the next 18 months via equity and unsecured loans to support growth and debt reduction.
Price increases in Phase 3/4 markets (6-7% impact) and Phase 1/2 (from August 1) to fully reflect in revenue from Q2 FY19 onward.

Research report

companyname: Hathway Cable and Datacom Limited ticker: HATHWAY sector: Telecommunications / Media and Entertainment Hathway Cable and Datacom Limited is a subsidiary of Reliance MDA Group that provides fixed-line internet and cable television services to Indian homes. It runs two distinct businesses under one roof. The broadband business (operated directly by the company, referred to as HCDL) is an internet service provider offering high-speed data connections using DOCSIS and GPON fiber techno...

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Catalysts

margin expansion, new product segment, debt reduction

Growth guidance

No guidance

Management consistency

mixed

RS rating: 37 Stage: Stage 3

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