GTPL Hathway Limited (GTPL) Q3 FY23 Earnings Concall Transcript

GTPL Hathway Limited (NSE: GTPL) Q3 FY23 earnings concall dated Jan. 13, 2023

Corporate Participants:

Anirudhsinh Jadeja — Managing Director

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Analysts:

Pulkit Chawla — Emkay Global Financial Services — Analyst

Parth Kotak — Alpha Plus Capital Advisors — Analyst

Vinit Manek — Karma Capital Advisors — Analyst

Yash Matai — Sushil Finance — Analyst

Raj Ojha — GB Capital — Analyst

Richa Meena — ICICI Bank — Analyst

Dharma Venkatesan — — Analyst

Rama Manohar — — Analyst

Presentation:

Operator

Ladies and gentlemen, welcome to the Q3 FY ’23 results conference call of GTPL Hathway, hosted by Emkay Global Financial Services. [Operator Instructions].

I would now like to hand the conference over to Mr. Pulkit Chawla, Emkay Global Financial Services. Thank you and over to you.

Pulkit Chawla — Emkay Global Financial Services — Analyst

Thank you, Darvin, and good evening everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Anirudhsinh Jadeja, Promoter and Managing Director; Mr. Piyush Pankaj, Business Head, CATV & Chief Strategy Officer; and Mr. Anil Bothra, Chief Financial Officer.

Without further delay, I shall now hand over the call to the management for their opening remarks. Over to you gentlemen.

Anirudhsinh Jadeja — Managing Director

Thank you, Pulkit. Good evening, everyone. I am pleased to welcome you all to our quarter three and nine months ended December 2022 earning conference call. We continue to be the number one MSO in India and constantly growing our subscriber base, both in digital cable TV and broadband segment. Before I provide business update, let me use this opportunity to announce that we recently changed our brand identity to encompass Entertain and Connect. In order to communicate the wide range of product and services offered by us, including entertainment in the form of cable TV and OTT and connectivity in the form of high-speed broadband. As well as new products and services to be launched soon.

Coming back to the business update. I’m extremely pleased and excited to announce to launch GTPL Genie+ and OTT aggregation products, which offers subscription to be wide choice of OTT application in convenient pocket-friendly packs. It’s an off-the-shelf products that can be used by cable or broadband customers of GTPL. But digital push in India provides immense opportunity on the broadband front. We plan to be a front-runner of push Internet service in existing and new geographies by providing value-added service at cost of effective trade by following a customer-centric approach.

I now hand over to Mr. Piyush Pankaj, who will take you through business and financial aspect of the company.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Thank you, Mr. Jadeja. Good evening, everyone. I am pleased to announce the business and financial performance of GTPL Hathway, the largest MSO in India as per price performance indicator report. On the basis of our strong foundation and past performance, I’m pleased to announce that we have entered three new states for our digital cable TV business: Delhi, Haryana and Uttarakhand. And other state Uttar Pradesh, we have entered two quarters back. We are receiving positive response from these geographies and then planning to build on this to grow and penetrate our presence in these states.

This is testament to the quality of services that we provide and the customer-centric approach that we follow. We are constantly exploring new opportunities on the digital cable TV side by expanding in new geographies where we can expand on a large scale on back of our expertise and experienced team. We have launched GTPL Genie+ and OTT apps aggregation product, which offers subscription to a wide choice of OTT applications in convenient pocket-friendly packs. This pack will be available in one month, three months, six months and annual subscription. GTPL Genie+ will provide access to up to 15 plus leading apps and will also offer up to 80% saving compared to MRP of these OTT apps.

In addition, we also provide savings in the customer in the form of 100% guaranteed cashbacks. Our digital cable TV subscriber base as on 31st December 2022 stands at 8.90 million. Paying subscribers for digital cable TV, stands at 8.30 million. On nine-month y-o-y basis, the increase in active and paying digital cable TV subscriber is 700k and 800k respectively. Subscription revenue increased by 3% Y-o-Y. In the broadband business, we added 130k new subscribers, an increase of 17% on a y-o-y basis. Homepass subscribers stood at 5.15 million as on 31st December 2022, of which 75% are available for FTTX conversion.

The broadband ARPU for quarter three FY ’23, stood at INR455, an increase of INR10 on a y-o-y basis. The average data consumption per customer per month, stood at 310 GB, a 28% increase y-o-y. The broadband segment provides immense opportunity and we plan to capitalize on that by providing value-added services and the launch of GTPL Genie+ will help us to extend our broadband services and in retention of customers.

Moving on to the financial performance. On a consolidated level, excluding EPC contract, in quarter three FY ’23, revenue grew by 15% y-o-y to INR7,050 million. The digital cable TV subscription revenue stood at INR2,775 million, up by 3% y-o-y.

We see — we saw a consistent growth in our broadband segment. Broadband revenue increased by 18% y-o-y and revenue stood back to INR1,243 million. This was driven by a healthy subscriber addition as we are on track to reach 1 million subscriber base by the end of this fiscal year. Consolidated EBITDA for the quarter stood at INR1,314 million with a margin of 18.6%. PAT for the quarter stood at INR376 million. We are a net debt-free company, generating free cash flows and paying dividend history of last six years.

Thank you, everyone. We can now begin with the question-and-answer session.

Questions and Answers:

Operator

Thank you very much. We will now begin with the question-and-answer session. [Operator Instructions]. The first question is from the line of Parth from Alpha Plus Capital. Please go ahead.

Parth Kotak — Alpha Plus Capital Advisors — Analyst

Hi, good evening, sir. Sir, firstly, congratulations for a decent growth in the broadband active subscriber base. Sir, even in the last quarter, we had talked about this, that our ARPU and CATV business is actually coming down, which seems to be the case even this quarter, and it has come down substantially. So if you could throw some color on the same?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Yes, Parth. Actually, as you know, that we are entering into a new market. As you know, we have given that from last 1, 1.5 years, we have gone into the south market, mainly Tamil Nadu. And then we have entered into Orissa, some of the North East market. And now we are going into the big way in the North market. What is happening that the new subscribers, which are coming to us, they are coming at the lower to the average ARPU of our earlier market. So we are dominant in Gujarat, we are dominant in West Bengal. We are dominant in Andhra Pradesh. We are dominant in Maharashtra.

So all these markets, we are maintaining our ARPU or increasing our ARPU as we are dominant in those markets. As you go into the new market, you have to start from the — a bit lower ARPU. And then you have to wrap it up with the time as you become dominant number one and number two, which is the endeavor on which we become in every market number one, number two within two to three years. So that is happening. Like in Tamil Nadu, we are already crossing now 800k subscriber base in the Tamil Nadu closing to 1 million.

So we are looking forward that we will take the ARPU over there. Same is happening in North East market as we entered in the last year, and now we are becoming number one, number two player over there. So slowly, you will see that whenever you do the expansion at that time, you have to take a bit of hit in the ARPU. And we are — we have to increase our ARPU at all the places as we talked in the earlier call also. Right now, we are waiting because we have to see if there is any regulatory change, which is on the door, if it is coming, then we will do it at that point. Otherwise, we are going to take the call in the first quarter of FY ’24.

Parth Kotak — Alpha Plus Capital Advisors — Analyst

Fair enough. That’s great. Sir, also, if you could help me with if — on the ARPU side, if this is the ARPU that would be the lowest or we could see even lower ARPUs going ahead. And you also mentioned that as we get into newer geographies, which is understandable ARPU would be slightly lower. But so is that the case that the new additions would be primarily from newer geographies?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Yes. That is what is happening, Parth, that the new additions are coming from the new geographies. As you already, like in Gujarat, if I talk about I’m a dominant player having 80% of the market. So here, I’m just adding every year 2%, 3%. But if I’m going into the new market, there I’m adding at 10%, 15% on that basis. So yes, the subscriber base is coming from the new market. We are making the strategy that how we are going to ramp up our ARPU. As from last two calls, we are talking about that. And we will take some steps in FY ’24 regarding that.

Parth Kotak — Alpha Plus Capital Advisors — Analyst

Fair enough, sir. That was really helpful. Sir, last question on the margin front, we’ve seen margin come down a little bit from a normal level. Is this the reason for the margin drop is the same, whereby penetration into newer geographies, will probably also lead to lower ARPUs plus have some additional cost? Or is there some other factor which is probably leading to the margin compression?

Anirudhsinh Jadeja — Managing Director

So if we talk about — we have gone into the North market, the whole of the North market, and we don’t have any establishments over there. In other markets, if we go, we have some establishments. So there, we have to start from the scratch. We have to create the whole establishment and everything and then started doing the acquisitions and adding the subscriber base. So all the cost has increased a bit in this quarter because of — we entered into the new market and make the establishments from scratch.

And we have opened a number of offices over there. We did recruitments over there. And all the backbones, we have — we have to make there on the fiber and all we did it. And we are going on aggressive basis on the acquisition fronts also, and the swapping or you can say the — taking the customers — direct customers also. So both are going on. The revenue will follow on those basis. This is, I will say, one of the partner where the blip has come because of the high cost of establishments and all, we are going to, again, on the track as we are doing in the last five to six years, and we are going to maintain our budget. Super, sir. That’s all from my side. Thank you for taking my questions.

Operator

Thank you very much. The next question is from the line of Vinit Manek from Karma Capital Advisors. Please go ahead, sir.

Vinit Manek — Karma Capital Advisors — Analyst

Hi. Thank you management for this opportunity. So again, a similar question from the previous partnership that we have seen a significant increase in our other expenses, excluding the pay channel and the employee cost. So is this a sustainable number going forward? Or was an extraordinary during this quarter, and we might see the cooling off of this number in the coming quarters? So how should we look at the other expense line item going forward?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Other expenses, this is exceptional quarter for us also as we decided to enter into new markets. And there, we have to do all the establishment from the scratch as I told. This is an exceptional quarter, I will say on that basis. Whatever cost we have to incur for the establishments for creating my networks and everything has already been done in this quarter. We have started acquiring customers already around more than 1 lakh customers have come from those markets. But yes, there are revenues as we are taking it in this quarter, the revenue will start coming from the next quarter. We will start seeing that the revenue will follow this cost, and this cost will remain at this level only.

Vinit Manek — Karma Capital Advisors — Analyst

Okay. Okay. And also coming down to the subscription income. So we have almost added 0.5 million subscribers this year. And we are aiming to add 1 million kind of a subscriber by the end of this year, but our average growth for nine months within the subscription income has been closer to 2.5% kind of a number. And with the NTO 2 clarity coming in now, how are we seeing the growth in the subscription income going forward? So can we expect a high single-digit kind of a subscription growth coming in from next year? Or a similar kind of a number with the aggressive customer acquisition strategy will be there in the coming year?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

No, we are keeping that strategy, in fact this is a risk but we are going back to the double-digit growth. The number of acquisitions as will increase, as I said that we are expanding right now and just started expanding on the acquisition basis. There is an effect on the ARPU side. Those will get stabilized as we go forward, I would say, in next two quarter. And you will see that consistent ARPU is going to be there. Plus, there is a plan to increase the ARPU, already the plan is there. We have delayed that because of NTO 2 implementation and all, and we have not taken this out. But whatever will happen, we are going to take that call in the first quarter of FY ’24. And there you will see that the ARPU is also increasing and subscriber base is also increasing, and we are keeping our target that we will go to the broad based growth in the revenue side.

Vinit Manek — Karma Capital Advisors — Analyst

Okay. Okay. Okay. Also coming on the broadband side. So we had a good addition this quarter, but it is very similar to the previous quarter’s run rate. And I think on the previous call, you mentioned that the large part of this addition is coming from the B2B side of it and the B2B addition was slow over the last two quarters. So was it a very similar kind of situation this quarter also, for the broadband? And how are you seeing this number accelerating? Because I think we are a little bit behind our targets and our aspirations about the broadband subscriber addition. So how should we look at that going forward?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Yes. This quarter also the addition — whatever addition has happened around 25C which is pure G2C addition. Still B2B has not started contributing to the path. B2B as in the last quarter also we said that we are bidding around 60k subscribers already in the pipeline and which is in integrated with our system. A bit delay has happened on that because of the technical unsimilarity between the network. But that has already been solved. And we are hopeful that as we talk, that integration is happening.

So by January end this 60k subscribers will get onboarded, and we will start getting the revenue from there. So B2B contribution, if I will say, it has not happened until time. Whatever 130k subscriber in last one year we added, that is all the B2C subscribers. But as we started doing this, as we get the experience of onboarding and everything, we are hopeful that the B2B onboarding and B2B subscriber base will start getting addition every quarter in a good numbers and that will start giving us the revenue side also and subscriber sizes.

Vinit Manek — Karma Capital Advisors — Analyst

Okay. Okay. Okay. And Piyush, just last question from my side. So what was the nine-month capex that we have already incurred? And what is the remaining target for the quarter that we are intend to spend?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Yes. So total capex, which has happened in the nine months is INR3 crores — INR355 crores, on which CATV capex is INR180 crores and broadband capex is INR175 crores. The guidelines, which we have given, that we are going to be close to INR450 crores capex this year. We are sticking to that for the last quarter that INR100 crore more capex will happen and that will be 50%-50% in CATV and broadband. So this is the situation right now.

Vinit Manek — Karma Capital Advisors — Analyst

Okay. Thank you. Thank you very much for patiently answering my questions.

Operator

Thank you. [Operator Instructions] The next question is from the line of Yash from Sushil Finance. Please go ahead.

Yash Matai — Sushil Finance — Analyst

Hello, sir. I had a question regarding the CATV business. My first question is, do we expect going forward in, let’s say, next two to three years after acquiring substantial market share in the new territories, the margins to expand and reaching the levels of 12%, 10%, which we were doing previously, two years back? Or how is it?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Hi, Yash. Yes, that’s the expectation. As you know, we are going aggressive in the acquisition mode right now. And if you see one of the strategy which we locked on the IPO time is the consolidation of industry, and we wanted to do it from 2020 onwards, but we have not started that due to COVID and everything. Now we have started. So we are going on an aggressive way for the consolidation of the acquisitions. And as we go forward, as we get to more and more subscribers, we become dominant on those markets, but revenue and ARPU will follow. And the double-digit growth, which we were doing from till last year, that you will see that it is back to normal. So that’s the way we are making it. And that’s the strategy on which we are working.

Yash Matai — Sushil Finance — Analyst

Okay. Thank you. My second question is with respect to the GTPL Genie, which was launched, I think, 10, 15 days back. So as I can see on your website, there are four different packages which are offered. So could you just throw some light as to how much would be the margin which we can expect from these plans. And going forward, I’m not able to see like a prominent name Netflix being — OTT being offered to us to the customers. So do we have any plans of onboarding them? And lastly, it was recently announced that IPL would be on JioCinema. So what are your views on that? Do we plan on doing some partnerships with them as well? Or how is it for the OTT plan?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

So first, on the Genie+. Genie+ product we have launched, which is more of an app aggregator and available to all CATV and broadband subscribers, existing and new of GTPL. It is off-the-shelf product, which customers can go directly and purchase it at a very competitive price. And we have made it available in 1, 3, 6, 12, all type of periods. Plus there are four packs of different choices of — for the customer. The customer can have whatever value according to their choice, they can take it.

Yes, if I talk about Netflix, when we launched our hybrid box, Netflix was integrated on that. But yes, we are in touch with Netflix to provide us the app, which Netflix has promised. There’s still some negotiations are going on. But as we wanted to launch Genie+, and all other apps where app already we have closed. So we have gone ahead and announced. We are hopeful that Netflix will also come into the fold very soon, and we will start providing Netflix to our subscriber base, to our customers.

Genie+ as you can say, on the margin sider now, yes, there is a margin. But we are more looking towards [Technical Issues] for the stickiness and the retention of the customer and it is available for our all 10 million customers, including CATV plus broadband. And we are looking forward that this is going to increase the stickiness, plus all the choices of content, which are households are required, that is we are offering. There is going to be a margin and the margin in such a way that it is not going to impact my EBITDA margin, it will be at the same level. And — but yes, that is the case. Coming to the Jio side, JioCinema is going to do IPL. So overall, it’s good for the customers, the newer city plan.

Anirudhsinh Jadeja — Managing Director

And it will start in the part of our OTT application.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Yes, it is part — this is going to be part of our OTT application also, that is going to happen. But yes, it is good for the industry and all, viewership is going to increase, but TV is going to be there throughout in the houses, the connection is going to be there through out the house as we understand as per the analysis and all. And somewhere Disney and Hotstar is also including their marketing and everyone, which is good for the industry.

Yash Matai — Sushil Finance — Analyst

Thank you so much, sir. Really helpful. Thank you so much.

Operator

Thank you. [Operator Instructions]. The next question is from the line of Raj Ojha from GB Capital. Please go ahead.

Raj Ojha — GB Capital — Analyst

Good evening, sir. So, sir, thank you for the opportunity. So, I have two sets of questions from my side. The first one is, sir, what are the growth trigger or the growth drivers points for our broadband business? And do we see any uptick in ARPU?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

The growth driver as I talked about — the total households in India is around 310 million and out of that only 30 million is right now, hardly one-tenth of it is the wired broadband. So we almost call this broadband business has a massive business right now. This has increased rapidly. If we talk about Eurozone, they are already crossed 60%. China is at 15%. U.S. is at 80% penetration of broadband and somewhere India will be going to catch up at those levels with the time.

So there is a large opportunity where the customers are there and you just have to reach those customers through infrastructure and start providing the services. So it’s just a large market. So the growth driver is that in India, it’s a volume growth, which we are looking forward for. Apart from that, value growth, we are looking forward that 2% to 3% will happen every year in the value growth that we are pushing, plus we are going to be the layering of services over the broadband, which will fetch more money from our households. We’ll try to do that. And that’s the strategy on which we are working.

Raj Ojha — GB Capital — Analyst

Okay. Okay. That’s helpful. And second question is, sir, how is the response in our new states, which we have entered on the cable TV side? So are we planning to scale it up? Or what are our plans to scale up the business?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Yes. So the response is very good, actually being a number one player in India, and having the best quality services established, a lot of responses are coming from those markets. And we have just started around two months back and already got more than 1 lakh subscriber over there. We are looking forward that within one year, we are going to cross the 1 million subscriber over North market. And the market is big, that’s why MD speaking good market. The ARPUs are going to be good on those markets. We are expecting that. So yes, so 1 million plus in the next one year time in those market.

Raj Ojha — GB Capital — Analyst

Okay. Sir, thank you. That’s it from my side. And all the best.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Thanks.

Operator

Thank you. [Operator Instructions] We have the next question from Richa Meena from ICICI Bank. Please go ahead. Ms. Meena, your line has been unmuted. Please go ahead with your question. Ms. Meena, if you have muted your line from your end, please check and go ahead with your question.

Richa Meena — ICICI Bank — Analyst

Hello. Yes, sorry. Good evening everyone. I just want — I wanted to know if you could throw some light on the high AGR dues that could be seen in the balance sheet?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Come again, please?

Richa Meena — ICICI Bank — Analyst

AGR dues, high AGR dues and how are we planning to go about it?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

AGR dues?

Richa Meena — ICICI Bank — Analyst

Yes, sir.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

AGR dues is on the contingent liability side, which is consistent from last three years, which is coming into the balance sheet. This is the duty which has given the demand for — on GTPL Hathway before 2016 when the Internet business and cable business was together. And based on that, they have given the demand on cable business revenues, adding that and which is already contested in the court. And according to the laws and all, we have a very sensible case. And already retrospectively, MIB and DOT has given that any revenues coming in the way, MIB licenses perspective, the MSO licenses and all, that is not to be included in the calculation of AGR. So we are very positive that the retrospective they have already given. And for later years, earlier years also lot of disputes and everything is going on. And it’s the prejudice right now is in the court. And we are hopeful that we will come clean out of that.

Richa Meena — ICICI Bank — Analyst

Okay. Thank you so much, sir. And all the best.

Operator

Thank you. The next question is from the line of Dharma Venkatesan [Phonetic] an Individual Investor. Please go ahead, sir.

Dharma Venkatesan — — Analyst

Good afternoon, sir. So my first question is regarding the increase in the pay channel cost. We have seen almost a 15% increase year-on-year for the nine-month period. And so what is the reason behind this increase? And how do you see that next month onwards major players have announced the price hike? So whether we will be able to pass on those prices hikes or our pay channel cost is going to get even higher from here and it might have an impact on our margins?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Yes. So I always explained this in my calls earlier calls also that whenever you are looking for the pay channel costs, you have to club it with the marketing and placement income, which is showing in the income because one is that you are paying to the pay channels. And second is what you are getting from the pay channels. So you have to go into the what is the net increase happening on the outflow side. And if you go on that basis, that you will find that there is not much growth on that part. We are GTPL being a number one player, and we have known for the best negotiations in the market. So we always try to keep our cost at least those costs at the par level. And if you combine this two, you will see that there is not much increase in the pay channel cost.

Dharma Venkatesan — — Analyst

Sir, and regarding the increase in channel prices that the major players have announced, which will come into effect from February, what is your comment on that?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

NTO 3, we are passing it NTO 3. Yes, we are waiting for the implementation on that side. As you see in NTO 1, when NTO 1, 2 happened, the industry has lost some of the subscribers initially and then again, they gained it. But NTO 1 is good for everyone, every stakeholders in the industry. We are looking forward that NTO 3 will also happen on that way. We have geared up that there should not be any chaos in the market and all, we are going to control that as we have the experience of NTO 1 and maintain the cost to the consumer on that basis, so that their household cost should not increase. So that’s the way we are endeavoring, yes, they are coming up with different rates, but we are going to make the things in such a way that the cost should not increase at the consumer level and all other benefits should get passed to the MSOs.

Dharma Venkatesan — — Analyst

Okay, sir. Thank you, sir. And my second question is regarding the newer geographies, which we are entering for our cable TV business. So in your geographies whether you have entered organically or do we have done some smaller acquisitions or consolidated the smaller players and brought in anything of that sort or is it like full and full organic growth in these newer geographies?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

No. We go for both strategies inorganic and organic. Yes, as I say that our strategy is going big in organic, which we use — which we’re not used to do earlier from last two years because of the COVID. But yes, we are going to do inorganic and organic both. Whatever number I have given you 1 lakh plus number in those markets that has come from inorganic and organic. So we are taking up both the strategies and going forward.

Dharma Venkatesan — — Analyst

Okay, sir. And regarding our 4k status, the status quo remains the same, right. Is there any other further update? Or I mean it is the same as previous?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

On which you’re talking about?

Dharma Venkatesan — — Analyst

Sir on the dues which we have for our cable TV businesses which was — there was suppose to be hearing in December?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

If you are and now you’re talking about, yes, the status quo is maintained right now. And in this quarter, there is no movement on that.

Dharma Venkatesan — — Analyst

Okay, sir. And my final thing is regarding Genie+. So from whatever your answers were given previously, I understood that. Genie+ is more of a product to make the customers more sticky rather than the product which we upsell so that if we get additional revenue, it’s not like that kind of product. So product — to increase the lifetime value or make the customers more sticky. Am I right, sir?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

You’re right. The margin is there. As I said, that the margin is there, as whatever EBITDA we are maintaining that margin we are getting in. So there is no negative impact on the EBITDA and all that is going to be positive only. But yes, this product is to provide all type of content to our customers. We are becoming content agnostic on that way. Till date, we are providing Star TV, Sony TV, we are providing also OTT. So this is the case, and it is going to increase the stickiness of our customers being on our platforms.

Dharma Venkatesan — — Analyst

And just a small final one, sir. I saw your interview in CNBC today morning. So in there you had mentioned you had hinted that there might be a possibility of merger, merger with Jio. Like is it so or are we only right now collaborating on a technical under IP level and we will continue to grow on our own. But what is the end game in this? What I’m really trying to understand.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Very speculative question, but still I’ll just say that what are the benefits being a partner, we have to get from the Jio, we are getting, and we are really happy with that. Jio being our partner, whatever guidance, knowledge transfer, vendor negotiations, all we are getting, and we are working on our strategy, the [Indecipherable] is there that we are working on our strategy, our plan and we are growing market, and we are performing. We are giving the dividends. We are net-debt free company, consistent performance throughout subscription — subscriber base is growing and everything is happening. Yes, we don’t know. We have to see how the future unfolds going forward, but we are keeping our strategy intact and going ahead and doing the business.

Dharma Venkatesan — — Analyst

Sir, so to summarize, right now, the collaboration is purely on a technical and knowledge level, as of now?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

That’s right. That’s right.

Dharma Venkatesan — — Analyst

Okay, sir. Thank you for answering the questions. And all the best for coming quarters.

Operator

Thank you. The next question is from the line of Yash from Sushil Finance. Please go ahead.

Yash Matai — Sushil Finance — Analyst

Hello, sir. Just a follow-up question. Could you just elaborate a bit on NTO 2.0 and how does it affect us going forward? And what are our ways to tackle the same?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

We are calling it NTO 3, Yash. And yes, we are anticipating that not much a change will happen. It will give us the opportunity to increase our revenue and bring more transparency in the market about the consumer for every stakeholder. We are trying to keep the cost to consumer at the same level so that there should not be any negative impact on the market on that basis. So we are anticipating that not much will change at the consumer level, and it is going to help us in growing our business.

Yash Matai — Sushil Finance — Analyst

Okay, sir. Thank you.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Thank you.

Operator

Thank you. The next question is from the line of Rama Manohar, an Individual Investor. Please go ahead.

Rama Manohar — — Analyst

Hi, sir. Just I have one question. See, why not to invest total money in the broadband sector other than cable TV? Anyhow the business is — because in metro, many people are cutting off this and moving out from cable TV. So does it make more sense making all the investments in the broadband side? Because even broadband, we have a competition in the future, maybe in the wireless. If you get 5G, they may introduce maybe some sort of set top box or something else to receive the signals, that time we will have a competition, right?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

A different strategy, which you are talking about, but we look forward in this way that cable business has a lot of potential going forward. Still the TV households are increasing. Still, there are very large market of cable, which has to get consolidated. And the third point is the return on cable. ROI is very quick. You can say between maximum between 10 to 18 months, you are getting the ROI back. If I talk about the broadband business, ROI is a bit late, it’s 24 to 30 months, which we are going to get back.

So still the ROI basis, if you say cable business is good. And growth is there, a lot of potential to do in the market right now. As we are starting the convergence of the services, bundling of the services, entertainment plus broadband plus OTT plus we will add more services, layering of the services of that. So it’s good to be in the business and start owning the customers at whatever it wants. We are a kite reaching to the customer house. We just have to provide all types of services to the customer to keep customers impact with that and generate more and more revenue from that households.

Rama Manohar — — Analyst

But still, we are adding very few numbers in the broadband sector, right? I think because the market people, if you are not adding maybe they netted connection from either Airtel or Reliance Jio Fiber and other things. Seeing that number, 30,000 to 50,000 are very less, I think, considering that we have built a base of around 10 lakhs, right and 5 million homepass. So is it not a little low?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

No. On the extraction level, if you see, we are doing best in the industry because we are operating, if I talk about B2C, as I said, we are just operating in the Gujarat market and six of the cities. And that’s the way. If it go on the extraction basis, we are the best in the market right now also. Yes, we are starting the B2B in our all cable markets, which still to take off. So we will see that how it imports in FY ’24, but we are very run over on this broadband business, still lot of potentials in whichever market we are present, and we are going to do [Indecipherable] as we are doing right now.

Rama Manohar — — Analyst

And my last question, do you think these margins are going to improve for the next quarter? Or are they going to be like this only because they are making INR30 crores or INR40 crores profit like this. How it is going to be?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Yes. As I said in the beginning that during the call also that this is an exceptional quarter, where we did exceptional establishment costs for the new markets as we have — we have a good presence on those markets. So we have to establish all the assets, my network, my new manpower, everything, bandwidths, everything we have to do from the scratch. And the customer has to follow that, also the other revenues are going to follow that. So yes, this is an exceptional contact. We are looking forward from here onwards, the margins and everyone will go like this.

Rama Manohar — — Analyst

Sir, one last question. Sorry, again. How actually — the company actually backed by Reliance and other things, but why our company stock is trading like in a narrow range, maybe even after the five years of an IPO and our profits are INR40 crores. And the company has come maybe at — offer the share at INR170 something it has listed — was listed. Now it’s still trading at INR130 despite our profits are around INR200 crores and why our maybe big investors not coming, maybe mutual funds are not showing interest? Are you taking any steps that people are not coming to us?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Whatever we have promised as a management, as a Board, whatever we have promised in the IPO, we have met that, but we are going to increase. If you see we have — in the broadband side, we have increased 5x in the subscriber base. The cable side, we have increased around 2.6x of the subscriber base. The revenue has grown fivefold in the last six years. We are paying dividend from last six years. Last year, 40%. So all those things are happening. We are managing our cash flow much, much better as we have net debt free company right now. We have paid around INR400 crores of debt in the last five years. Free cash flow generation is happening in the business throughout. So that’s from the management side and the Board side, I would say. Share price and all speculation, we can’t comment on that.

Operator

Thank you. That will be the last question for today. I now hand the conference over to the management for the closing comments.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Thank you, everyone, for joining the call. Be safe and healthy. We look forward to interact with you with the FY ’23 annual results somewhere in April. Good evening, and have a great day.

Operator

[Operator Closing Remarks]