GTPL Hathway Ltd (GTPL) Q4 FY23 Earnings Concall Transcript

GTPL Hathway Ltd (NSE: GTPL) Q4 FY23 earnings concall dated Apr. 17, 2023

Corporate Participants:

Anirudhsinh Jadeja — Promoter and Managing Director

Piyush Pankaj — Business Head, CATV and Chief Strategy Officer

Analysts:

Pulkit Chawla — Emkay Global & Financial Services — Analyst

Yash Sarda — Sushil Finance — Analyst

Aniket — BMSPL — Analyst

Karan Mehta — Nirzar Securities — Analyst

Pawan Nahar — — Analyst

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Rakesh Parikh — Rockstar Capital LLP — Analyst

Ketan Athavale — RoboCapital — Analyst

Guneet Singh — CCIPL — Analyst

Rama Manohar — Individual Investor — Analyst

Presentation:

Operator

Ladies and gentlemen, welcome to the GTPL Hathway Q4 and FY ’23 Earnings Conference Call hosted by Emkay Global Financial Services.

We have with us today Mr. Anirudhsinh Jadeja, Promoter and Managing Director; Mr. Piyush Pankaj, Business Head CATV and Chief Strategy Officer; and Mr. Anil Bothra, Chief Financial Officer. [Operator Instructions] Please note that this conference is being recorded.

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

Pulkit Chawla — Emkay Global & Financial Services — Analyst

Thank you, Darwin. Good evening, everyone, and welcome to the GTPL Hathway Earnings Call. I would like to welcome the management and thank them for this opportunity.

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

Anirudhsinh Jadeja — Promoter & Managing Director

Thank you, Pulkit. Good evening, everyone. A warm welcome to everybody to the conference call of GTPL Hathway to discuss quarter four and annual FY ’23 financial performance. I’m glad to report yet another year of consistent growth in our broadband and Digital Cable TV business. GTPL to continue largest MSO in the country, as well as in Gujarat, and largest Broadband player in Gujarat. The Company has further strengthened its presence across all other markets, especially in southern state.

I’m pleased to inform you that the Board has recommended a dividend of INR4 for equity share for FY 2023. Both our digital cable TV and Broadband business continued to show healthy growth across India in terms of subscribers and ARPU.

I will now hand over the call to Mr. Piyush Pankaj, who will take you through the business and financial performance 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. Our digital cable TV subscriber base as on 31st March 2023 stands at 8.95 million. Paying subscribers stand at 8.20 million. On a Y-o-Y basis, the increase in active and paying subscribers is 550K and 400K, respectively.

In the broadband business, we have added 104K new subscribers, an increase of 11% on a Y-O-Y basis. Home pass subscribers stood at 5.30 million as on 31st March 2023, of which 75% are available for FTTX conversion. The broadband ARPU for FY ’23 stood at INR460, an increase of INR10 on a Y-o-Y basis. The average data consumption per customer per month stood at 321GB, a 25% increase Y-o-Y. On a consolidated level, excluding EPC contract, FY ’23 revenue grew by 12% Y-O-Y to INR27,140 million. The digital cable TV subscription revenue stood at INR11,005 million, up by 2% Y-o-Y.

We saw a consistent growth in our Broadband segment. Broadband revenue increased by 18% Y-o-Y and revenue stood at INR4,826 million. This was driven by a healthy subscriber addition. Consolidated EBITDA for FY ’23 stood at INR5,163 million with a margin of 19%. PAT for FY ’23 stood at INR1,145 million. We are a net-debt free company and our finance cost has reduced by 31% on Y-o-Y basis for FY ’23. For quarter four, FY ’23 on a consolidated level excluding EPC contract, revenue grew by 13% Y-o-Y to INR7,017 million. The digital cable TV subscription revenue stood at INR2,753 million, up by 2% Y-o-Y.

We saw a consistent growth in our Broadband segment in-quarter four FY ’23. Broadband revenue increased by 14% Y-o-Y and revenue stood at INR1,246 million. PAT for the quarter stood at INR124 million negative. There was a drop in the PAT on account of the following reasons. An exceptional item of INR189 million provided in quarter four FY ’23 with respect to the provision of certain identified old receivables on account of assessment of counterparty credit risk.

Second, increase in depreciation, amortization of FY ’23 by INR220 million on account of reassessment of useful life of select asset class and obsolescence of certain asset class due to technology upgradation. The standalone revenue excluding EPC for FY ’23 stood at INR17,328 million, an increase of 14% Y-o-Y. EBITDA stood at INR2,842 million with an EBITDA margin of 16.4%. PAT for FY ’23 stood at INR725 million.

This is all from my side. 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 the question-and-answer session. [Operator Instructions] The first question is from the line of Yash Sarda from Sushil Finance. Please go ahead.

Yash Sarda — Sushil Finance — Analyst

Good evening, sir. My first question is, how is the response on the GTPL Genie which was launched in December? And if you could give a number as to how many customers from our broadband — existing broadband have opted for the plan?. Secondly, second question is, what is the anticipated increase in consumption in the quarter which is coming or what you’re seeing due to the IPL? We have been seeing online. And last question is, how many customers or what is the conversion which we are seeing happening on the cable TV subscribers to broadband due to OTT happening and online streaming of IPL? That’s it. Thank you.

Anirudhsinh Jadeja — Promoter & Managing Director

Thank you. So we have launched Genie+ in end of December. The main responses have started coming from January month. And till date we have seen that around 12,000 subscriber base has come into — has taken this services in last three months and out of that 12,000, we can say that around 8,000 is from the broadband side and around 4,000 is our cable subscribers.

The second question on the IPL. We have not seen any effect because of having free in JioCinema that it has affected our subscription rejection or our subscriber reduction due to the IPL. So the effect is almost nil on that side, I will say.

And third question was on Genie, that how many subscribers have shifted from our broadband to cable or cable to broadband. The cross-selling is happening and because Genie we have launched as a standalone product. So that is not giving us Genie+ plus as a standalone product, where our broadband subscriber or our cable subscriber can take it as a standalone product and it’s a B2C product. So because of Genie we are not seeing that the convergence and all. Yes, we are hopeful that as we are going to launch the combined bundle of services which we are going to do in quarter one, entertainment plus broadband together, entertainment includes OTT plus Cable. That we are going to look after, that will give us a good chance in the market.

Yash Sarda — Sushil Finance — Analyst

Thank you. I just had one follow-up question. Although, you mentioned that there has been a blackout in the month of February, for I think six odd days. Could you just elaborate on that? And Star Sports, what I understand is, that is not a part of the package which you currently offer, it is on ala carte. So how that it is working out? Just two questions follow-up. Thank you.

Anirudhsinh Jadeja — Promoter & Managing Director

So basically the — it was not a blackout, all three broadcast, effective date 18th of February to 23rd of February [Foreign Speech] especially because of the [Foreign Speech] and the issue is resolved and everything is now normalized.

Yash Sarda — Sushil Finance — Analyst

Okay. And is — just confirming, Star Sports has been offered as ala carte or already bundled?

Anirudhsinh Jadeja — Promoter & Managing Director

No, it’s part of the bundle. We are not offering any ala carte.

Yash Sarda — Sushil Finance — Analyst

Okay. Thank you so much.

Operator

Thank you. The next question is from the line of Aniket from BMSPL. Please go ahead.

Aniket — BMSPL — Analyst

Good afternoon. Am I audible?

Operator

Sir, you are not loud enough so we are not able to hear you clearly.

Aniket — BMSPL — Analyst

Am I audible.

Operator

Yes you are audible, sir. Go ahead.

Aniket — BMSPL — Analyst

Yeah. Good afternoon, and thank you for having this. My question was a bit longer-term regarding the broadband business ARPU. So with effect of all the OTT providers coming in such and Reliance and having their own units. What do you feel is going to happen to your ARPU’s for the coming two, three years? I just wanted to get a broad picture.

Anirudhsinh Jadeja — Promoter & Managing Director

See, if you see from last two years our ARPU, which was at around INR400, we have gone up to INR460 in last two years time. We are looking forward that we will continue that journey that INR10, INR15, INR20 increase per annum, and that is because we are converting everyone into the FTTX. technology and pushing our subscriber to take the higher packages above 100 mbps, 150 mbps, 200 mbps. And that’s the strategy on which we are working.

Yeah, if you ask me, I am not increasing the rate of my packages, but I’m moving my lower packages customer to higher packages customer and that’s why the benefit is coming in our ARPU. And we look forward that we have to view that. That’s the strategy and we are looking forward that we continue to increase the ARPU as we are increasing from last two years.

Aniket — BMSPL — Analyst

All right. Thank you so much.

Operator

Thank you. [Operator Instructions] We have the next question from the line of Karan Mehta from Nirzar Securities. Please go ahead.

Anirudhsinh Jadeja — Promoter & Managing Director

Yes, Karan, you are audible.

Karan Mehta — Nirzar Securities — Analyst

Hello. Yeah, thank you, sir, for the opportunity. So I just have a couple of questions. So firstly, we have seen an increase in pay channel cost on an annual basis, so I just wanted to understand is this of recurring nature? And if so what would be the increase in — percentage increase in pay channel cost per year for next two to three years? And also what is the outlook on both of our businesses?

Anirudhsinh Jadeja — Promoter & Managing Director

Hi, Karan. Karan, we always advise the analysts to look the channel along with marketing and placement revenues. If we do the net pay channel cost on that basis, expenses — picture expenses, it’s hardly, you will see that there is 2% increase in the pay channel, hardly INR9 crores to INR10 crores which is there. So if you see for the whole year we have — the subscription is contributing around INR25 crores to INR27 crores and out of that pay channel is Just incurring INR9 crores to INR10 crores. So that’s the trend we are looking forward that the pay channel will be on 2%, 3% increase, not more than that on the net basis over the years.

Karan Mehta — Nirzar Securities — Analyst

Okay, okay, that was helpful. And sir also what is the incremental cost and depreciation cost per subscriber for both of our businesses? And what is the replacement cycle of for our picture sets in both of our businesses?

Anirudhsinh Jadeja — Promoter & Managing Director

So fixed asset if we talk about, we are depreciating our SPB’s in eight years time and the routers as at around 10 years — eight to 10 years in the routers, so the different mix. So that’s adding on the depreciation side. So when you talk about the replacements and all. Yes it takes eight to 10-year for the replacing any FX because they’re robust assets which are continuing with still the boxes which we have deployed in 2011, 2012 still continuing in our system and feel with the — if you talk about what routers we have put in 2015, 2017, which is still growing robustly.

Karan Mehta — Nirzar Securities — Analyst

Sir, and the first question, the incremental cost and depreciation cost for both of our businesses — incremental cost for per subscriber for both of our businesses?

Anirudhsinh Jadeja — Promoter & Managing Director

So per subscriber incremental cost if you talk about. If I’m adding one subscriber base and I’m getting around INR125 from that. On that if we talk about that, just the incremental operating cost which is net of my direct cost, which is pay channel and all, which is coming to around INR30, not more than that.

Karan Mehta — Nirzar Securities — Analyst

Okay. The cost is just INR30 per subscriber. So that is for CATV?

Anirudhsinh Jadeja — Promoter & Managing Director

That is for the CATV.

Karan Mehta — Nirzar Securities — Analyst

And broadband?

Anirudhsinh Jadeja — Promoter & Managing Director

Broadband also it is around — broadband is lesser because the main cost there is going on into two direct cost, which is direct cost and my customer acquisition cost which will be higher, which is more off. So there it is coming to around INR25 to INR30 extra operating cost, admin and operating cost.

Karan Mehta — Nirzar Securities — Analyst

Okay. And what is the depreciation cost per subscriber?

Anirudhsinh Jadeja — Promoter & Managing Director

Depreciation per subscriber, you can talk about, around INR90 in the cable side. And in the broadband side it is coming to around INR60 to INR70 in the broadband side.

Karan Mehta — Nirzar Securities — Analyst

Okay, Sir, if I can squeeze in one more question. So what is the acquisition cost per subscriber — sir, we had a discussion over the implementation of NT03 — 3.0. We expect that this may result in shutting down of some LTO’s and MSOs, which will in term give us an opportunity to acquire these. So I just wanted to understand what is the acquisition cost per subscriber for these MSO’s and LTO’s?

Anirudhsinh Jadeja — Promoter & Managing Director

Acquisition cost, I will say that it depends on lot of things that in which markets we are operating, what are the different aspects of those network technology wise, whether it is in the rural area or outskirts of city, whether it is in the main city, all those factors come…

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Basically it’s a which territories also, like up in the [Indecipherable] market has a different equation price, south market has a different price, whether it is area in Phase 1, whether it is area is Phase II, whether it is area is Phase III or Phase IV depends on the territory wise there is a price difference there.

Karan Mehta — Nirzar Securities — Analyst

Okay, okay, but if if they can just — if you can give a broad range for our major markets?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Majorly, if you see one of our major market like almost 60% to 65% is our HNS markets and is close to around 30% is like south market.

Anirudhsinh Jadeja — Promoter & Managing Director

Acquisition price depends on the network and all those things, whether it is in the north, if network is in there in Delhi and network is Kanpur, or if the network is in the Gorakhpur, if there is network in the Muzaffarpur, the rates — our positions are going to be different. So it’s very difficult to give you one figure on that way because it depends on different factors and that’s the way, Karan, we can go offline on this that how we come into the acquisitions and all those things and how to determine the prices on acquisitions.

Karan Mehta — Nirzar Securities — Analyst

Sure, sir, and thanks a lot for all these clarifications. Thank you, sir.

Operator

Thank you. The next question is from the line of Pawan Nahar, an individual investor. Please go ahead.

Pawan Nahar — — Analyst

[Technical Issues]

Anirudhsinh Jadeja — Promoter & Managing Director

Hi, Pawan, you are not audible.

Pawan Nahar — — Analyst

Sorry, I’m so sorry. Am I audible now?

Anirudhsinh Jadeja — Promoter & Managing Director

Yeah, Pawan. Go ahead, please.

Pawan Nahar — — Analyst

Thank you. So I wanted to understand — we’ve done a capex of around INR470 crores in FY ’23. What is the plan for ’24, in particular number?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Yeah, so capex we did INR468.5 crores in FY ’23. Out of that, broadband capex is around INR224 crores — INR225 crores, rest is the CATV capex. As we are saying throughout in the call that we are keeping around INR450 crores to INR500 crores and we are looking forward in next three years, we are going to do INR1,400 crores of investment. So we are still sticking to that — that depending upon the opportunity we will be keeping at INR450 crores to INR500 crores of capex, which is going to be 50% in each of the business.

Pawan Nahar — — Analyst

So every year INR450 crores to INR500 crores beginning FY ’23?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

That’s right. For next three years, INR1,300 crore to INR1,400 crore.

Pawan Nahar — — Analyst

So that is number one. Number two, now what I’m struggling to understand is your absolute EBITDA. I don’t want to focus on that because let’s eliminate the — I mean we could look at that as well. So EBITDA is like what it was in FY ’20 [Technical Issues] done in such a big investment, right? Our gross or whatever — I mean whichever way you look, in the last two years we’ve spent about INR800 crores, FY ’22 and FY ’23, and our absolute EBITDA, right, is down by almost 10% to 15%.

Anirudhsinh Jadeja — Promoter & Managing Director

9%.

Pawan Nahar — — Analyst

Yeah, so I’m unable to understand that till FY ’22, let me dollar that you are investing was yielding good return. Certainly in the last 12 month particularly there just a collapse. I don’t — I get into the detail of the CATV, all I want is [Phonetic]

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

[Foreign Speech] we have lost around INR30 crores. [Foreign Speech] That is a non-cash item. Cash basis [Foreign Speech] Because of that INR130 crores we have gone out there. Second, this fourth quarter, yes, we have lost around INR10 to INR12 crores because of the blackout which we expect. [Foreign Speech] which you will see that jump in the quarter one. [Foreign Speech] which was contributing in EBITDA and revenue both side.

Pawan Nahar — — Analyst

So FY ’21 right, FY ’22 [Foreign Speech]

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

FY ’22 may around INR3 crores to INR4 crores.

Pawan Nahar — — Analyst

[Foreign Speech] generally, what is the kind of EBITDA or ROCE up [Foreign Speech].

Anirudhsinh Jadeja — Promoter & Managing Director

Basically [Foreign Speech]

Pawan Nahar — — Analyst

[Foreign Speech]

Anirudhsinh Jadeja — Promoter & Managing Director

[Foreign Speech]

Pawan Nahar — — Analyst

So can I aske you in very simple terms. I don’t have all the details [Foreign Speech] What should we expect in FY24?

Anirudhsinh Jadeja — Promoter & Managing Director

[Foreign Speech] we are doing revenue growth of somewhere around 17%, 18% on that basis and EDITDA growth was somewhere around 13% to 14% every year [Foreign Speech] that we are going to continue ins FY24.

Pawan Nahar — — Analyst

So more like 13%, 14% EBITDA growth?

Anirudhsinh Jadeja — Promoter & Managing Director

That’s right.

Pawan Nahar — — Analyst

And 13% to 14% EBITDA growth. Okay, just a moment. Then I wanted to ask you, you said like — so when you say you’re going to spend INR450 crores, INR500 crores, is this like acquiring other small cable TV operators or how — where is this money going to go outside of broadband?

Anirudhsinh Jadeja — Promoter & Managing Director

You are talking on the broadband or CATV?

Pawan Nahar — — Analyst

Outside of broadband, CATV.

Anirudhsinh Jadeja — Promoter & Managing Director

You are talking about CATV. CATV, you have to understand the market right now. You have to do two type of capex investment. One is to maintain your subscriber base and second is to gain new subscriber base. Maintain is because the churn rate, which was — the churn rate which is going on in the industry which is adapting to 16%. So if we talk about, right now I’m at 9 million, 15% to 16%, of 9 million, which is like 1.4 million to 1.5 million subscriber base, which I have to gain just to maintain my subscriber base and my revenue. And then I have to invest much more to have our net subscriber base positive so that I can gain more revenues and more EBITDA. So that’s the cycle on which every consumer — you can say direct consumer activity is happening where the subscribers are. You talk about telecom, you talk about DTH, wherever it is there, there is a churn there and to maintain that churn you have to make some capex additions, plus we have to do more capex to bring more revenues and EBITDA. So that cycle will continue over here also.

Pawan Nahar — — Analyst

Understood. So basically when we say churn 15% and we give the subscriber a set-top box and we incur other cost for activation. So if every year there is a churn of 15%, that means that I think it is a huge cost which is not recovered and then we will keep having these price increase depreciation or write-offs.

Anirudhsinh Jadeja — Promoter & Managing Director

No, we are recovering the boxes. We are redeploying some of the boxes. But yes you are right, we can’t recover the 100%. It depends that whatever we are recovering, whether it is useful or not we are doing the repairing also, putting refurbished box for this into the market also, but yes, that is not coming 100% back. You will recover around 50% or 55% boxes and then you do that whatever repair or some refurbish you can do and put it into the market, that goes back to 30% on.

So it the depends on retrieval costs here. And we are collecting INR500 activation and box cost of INR800s. So because of INR300, if we will for recover and [Foreign Speech] we we’ll decide whether we want to recover or. So those factors work here because when you are doing the recovery you have to do with some recovery costs, so whether going for that or whether you should go for the new boxes straight way, which is going to fetch you INR400, INR500, from the market and whether you want to do recover of those boxes, which is the remote areas and all, all those factors work on that. [Technical Issues] in market we have to go with less capex on those.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

Sorry. And the second thing, Karan, because some places that’s a strategic decision because in earlier [Indecipherable] one and two implemented in 2012 and 2014, and because of that, that time the technology was MPEG 2. So it’s a policy decisions. Company has already taken, we will not further put MPEG 2 box. So that box is completely absolute [Foreign Speech] because we are completely our — right now the 95% business we migrated in MPEG 4 box.

Pawan Nahar — — Analyst

Okay, and this year there is no dividend and we did not do any buyback.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

We have declared INR4 as dividend. I think Mr. Jadeja said in his opening remarks.

Pawan Nahar — — Analyst

It was both interim or final?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

It’s a final one of INR4. With shareholder approvals at all, but our Board has recommended for INR4.

Pawan Nahar — — Analyst

And one more thing I wanted to ask you, Mr. Jadeja is basically we are at 75% already, the promoters between the two and the stock valuation seems pretty interesting close to book-value [Foreign Speech] despite your five-year ROE in 16% and it maybe rightly so, maybe there are concerns. So is there any way we can do something proportionate buyback or something like that? I mean, actually, sorry — basically I’m wondering what could the management do about the stock price?

Anirudhsinh Jadeja — Promoter & Managing Director

[Speech Overlap] These are promoters call, strategic call because as a company we can’t comment on these things. This has to be taken at the strategic level with the promoters and then to the Board that what we should do and so we can’t comment on this.

Operator

Thank you. [Operator Instructions] The next question is from the line of Saket Kapoor from Kapoor Company. Please go ahead.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Yeah, and thank you for this opportunity. Sir, you mentioned about capex of INR450 crore for FY ’23, sir?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

INR468.5 crore.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Out of this it’s entirely is this operational capex only or how should one look at this spending? What goes into technological upgradation and what goes into capacity augmentation? If we look at capex, the format has to be into capacity augmentation that will lead to further revenue going ahead and how much is going towards the operational capex which is needed to maintain — to run the entire system, so if could give that split?.

Anirudhsinh Jadeja — Promoter & Managing Director

Yeah, so if I come to first on the broadband side we did INR225 crore of capex on that. If I talk about, we did around 550K of home passes on that, which is the capex we have put around INR20 crores to INR22 crores just making into the home pass, plus there is around INR30 crore which we did in the technology side. Technology enhancements in the backend and all. The rest has come for the customer acquisition cost in the broadband side. Same in the cable, I will say that — as done by saying that we are going from MPEG2 to MPEG4, those side the technology enhancement and side, we are big around the INR25 crores of capex on that side, plus on the enhancement for our technology side, we did around INR20 crores of capex on that side. Rest has gone into the business side.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Sir, when we look at the capex part of companies there, wherever company spends [Foreign Speech] going ahead that is the order of what capex is defined. So in our case, some capex goes towards the modernization, towards retaining of the clients. So when we are spending that money, what is the ballpark we work around? [Foreign Speech] if you could give us color on the same of — what are going to be the customer count going [Foreign Speech]

Anirudhsinh Jadeja — Promoter & Managing Director

See, cable side [Foreign Speech] to maintain our subscriber base and all because we are recovering some boxes we are putting it into the market also. So that is around — out of the total that is around INR50 crore to INR60 crore which is going into the maintaining the subscriber base and all, the rest is going in increasing our subscriber base and plus the technology enhancements and as we go into the new market we have produced some of the capex — network capex and all, so that’s the way we are doing it in the cable side.

In the broadband side, as you will see that the — to maintain or you can say because the churn that is around 20% to 22% in the broadband side. So there you have to do somewhere around INR70 crores to INR80 crores in maintaining the business and rest in helping the business and thus making the home pass plus the technological upgradation and all, which is going to give us generate more and move subscriber fees and revenue.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

So when we look at the profile for both Cable TV and Broadband going ahead, it is going to be — my basic understanding is that broadband is going to be the claims winner going ahead and everything would be clubbed under that, whether it is television and networking — internet would be the key. So going ahead, how do you — what are you visualizing in terms of this Cable TV business contribution, I think over the last two years we have seen the revenue shifting towards broadband, so how likely is going to be the mix going ahead and the customer preference with the laying of optic fiber cables and the internet penetration going ahead, how good the number would be that in terms of the split between the cable and broadband mix? And I think so broadband would be contributing to the bottom line also in a significantly higher EBITDA number than what Cable TV is.

Anirudhsinh Jadeja — Promoter & Managing Director

Last six years, you will see what the Capex we did, last six years I’m talking, we did around 60% to 65% around in the broadband side, only 37% has gone into the cable side. The cable side your capex has started increasing from last year when the churn has also increased and we have to increase our — for maintaining our subscriber base around INR50 crores to INR60 crores more we have to spend on the cable side.

So that is the case, otherwise yes, whatever the benefits or you can say the capex which we have put in the broadband side and we’ve made around, jump-up around 3.8 times in the subscriber base in the broadband. The base is much, much higher than what we did in 2 times in the cable side. So yes, Broadband has gone up and that is one of the reason that we wanted not only dependent on the cable, which you are seeing that in the signals we built and all that Broadband also started contributing a significant part and the business is not totally dependent on one business and that’s the purpose that both the business do good and start contributing towards the whole consolidated capex and that’s happening and that’s a good sign for us.

Continuing business as we talk about, we have in the — as a management and as the industry and all, we are seeing that cable is not going anywhere, it is going to be there. This going to generate whatever cash we are generating and going to grow from here only. As you see that, still non-TV households which is going to be there. The consolidation of whole cable industry is still open as 80 million subscriber base and only all for the 9th, they have just around 40 million right now subscriber base and therefore it’s a 45 million subscriber base is lying there, which is there. But yes, you can say that we have to combine the business broadband plus entertainment, plus OTT plus those services together as we consider ourselves as a pipe which we have the access to the home through that pipe and we have to increase our services in such a way that in consolidated way whatever need is there in the households we can provide that.

But yeah, we are looking-forward that both business are going to be good in the space. Yes, we have to combine those businesses together, combine those offerings, make it more lucrative for the customer, increase our services. Right now it is OTT plus broadband, increase more of our services which we can provide to the households and start providing all type of needs which satisfy all type of needs of the customers.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Sir, only a small point. In your opening remark also you mentioned about the percentage of conversion to FTTX. So then that conversion is towards the broadband part of the story only, the fiber-to-home part is you are referring to the broadband conversion only from cable to broadband aspect, is that understanding correct?

Anirudhsinh Jadeja — Promoter & Managing Director

No-no, not Cable to broadband.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

So earlier the technology was laid, metro Ethernet [Foreign Speech] almost today 90% business is almost migrated to in a GPON technology. So on home pass basis if I talk about, around 75% of our home passes in the FTTX and 25% is laying which we are converting and every year we are converting those. So when looking forward that we will become 100% FTTX in coming years. So it is from MEM technology which was LAA technology to FTTH direct-to-home technology.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Sir, in your presentation on Slide number 4 you mentioned about O&M contract of 17,000 kilos meter of Optical Fiber for BharatNet. Could you explain what are you conveying in there?

Anirudhsinh Jadeja — Promoter & Managing Director

Yes, that is for showing our capability. This network, this project is already got over last financial year, which I talked about EPC project, which we got further around INR1072 crores for laying the 17,000 kilometer fiber for the broadband ready fiber. So that’s a project which we did and we completed that. Yes, we have the capability of doing those type of big projects and we are looking forward as government is coming up with new tenders and all for every state. We are looking forward that we will participate in more type of these project.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

So also from this O&M contact, when will the revenue start kicking in, sir? What is the period from and what would be the annual revenue we will be garnering? If you could explain the nature of the contract, sir?

Anirudhsinh Jadeja — Promoter & Managing Director

See, the contract which we won at that point of time as INR1072 crores of EPC projects, plus INR57 crore — for four years INR57 crore of O&M operation and maintenance of this networks. The operation and maintenance of network has started in FY ’23 and those revenues are showing in other Operating Income. Actually, technically it’s four plus three. So four extendable to seven years and revenue has started in this financial year.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

So we will be booking revenue of INR57 crore, that will be — we will not be incurring any cost on the same. This is directly going to [Speech Overlap]

Anirudhsinh Jadeja — Promoter & Managing Director

We are incurring the cost and making the margin of around 25%, 23% to 24% on that.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Barring this restatement on account of depreciation and also in terms of, if I say the below the line item of exceptional item, when can we restore back to this 23% to 25% EBITDA margin, sir? And also, sir, if you could give us some more color on this exceptional line items of this [Indecipherable] written off. What was the period for which this money was lying on the debtors — the aging part and of the total receivable today, have you done the stress test for the same. I think [Indecipherable] is around INR292 crores currently. So are we done with everything?

Anirudhsinh Jadeja — Promoter & Managing Director

Yeah, so first, yes, we are done with everything, first thing. Second, if you talk about the provision for doubtful debts, that is amounting INR280 million, which is from certain identified receivables. As you know that the loyalty tower being auditor and being the first year. They have advised on conservative accounting and they have identified some of the parties where with the management discretion and all, the liability of outstanding has been doubtful. So there they have advised for taking provisions in books. If the company is able to collect the outstanding amount, it will reflect in our revenues in coming year. But yes, [Indecipherable] our auditor for this year.

They have gone for external conservative on that way. They have discussed all outstanding with the management and wherever they find that there is a [Technical Issues] they advice us to take the provisions in the books. And outstanding we are around one year-old, so one year three months something old, but they have advised us to take this on the books if you’re able to recover it, it will come back into the revenues.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

And out of this INR15 crores number of parties affected, from how many people it was due sir?

Anirudhsinh Jadeja — Promoter & Managing Director

Five — six parties are there.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Six parties are there. And we are doing business with them currently?

Anirudhsinh Jadeja — Promoter & Managing Director

Yes, we are doing the business with them currently and we are hopeful that we are going to recover those.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

So out of this INR292 crore, we are still owning money when they are still owing money to us INR292 [Foreign Speech]

Anirudhsinh Jadeja — Promoter & Managing Director

After after doing the provisions, they are at zero, okay. If we are going to be able to recover those, then that will come under revenue to.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

So is it any disputed amounts, sir. We have –is there any dispute on that figure or what is the nature of this?.

Anirudhsinh Jadeja — Promoter & Managing Director

Not disputed, but shares outstanding are there from those parties. They are always asking us for the time, being the amount a bit large for them And Page 6, we have given them time to pay us on those. Right now as you know, the amendment in tariff order has come and we are implementing that. Somewhere that has also given the idea to our auditor that as it [Technical Issues] it will become more difficult for them to pay us. So they have asked us to take pay in the conservative accounting in the provisions and they’re saying if you are able to connect, then it will come back.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Okay, and then coming back [Speech Overlap] My one question is left unanswered, if you could answer, then we can return to the our historical margin, that about 20% margin. When can we expect that?

Anirudhsinh Jadeja — Promoter & Managing Director

You have to understand that the margins we’re seeing it right now, you have to look at net pay channel. That trend up back. If you see on the net pay channel, which is pay channel expenses minus marketing and placement revenues, if we look into that we are almost at the same margin. Here is what is happening that my placement and marketing is increasing and my pay channel cost is is also increasing in the same ratio. So Placement and market revenues is not contributing towards the EBITDA and there our EBITDA margin is going down on the margins side. So when you look at the net pay channel cost, then you will see that our margin is almost maintained.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Sir, I will join the queue. Two more questions, but I will obey sir. I will join the queue.

Operator

Thank you. [Operator Instructions] The next question is from the line of Rakesh Parikh from Rockstar Capital LLP. Please go ahead.

Rakesh Parikh — Rockstar Capital LLP — Analyst

Thanks for the opportunity. Sir, just wanted to understand on the — our cable TV business, we have been number one in Gujarat and number two in West Bengal, and right now we are expanding in six more cities. So want to understand what is our medium-term plan over that over next two to three years so where we are expanding and what is the size we are looking at? And are the margins same or we spending more to acquire the customer in those areas?

Anirudhsinh Jadeja — Promoter & Managing Director

As I always say that our endeavor is that in next three years we are going to add 1 million subscriber base every year on that basis in the cable side. Yes, we are going into the new market, but we are keeping our economy in such a way that it is not going to hit our EBITDA. So the margins and all are at the same level and we are seeing that it should not affect EBITDA going forward. Yes, when you go into a totally addressable market, at that point of time we have to do some of the admin expenses and all. But as you get established within a quarters time, we will start making the margins at the same level, which we are making at the cable side.

Rakesh Parikh — Rockstar Capital LLP — Analyst

Okay. And looking at the broadband side, I can see the incremental profitability is much higher and we are able to get roughly INR10 ARPU increase on a Y-o-Y basis. So can we — is it safe to assume that the incremental contribution on the EBITDA side that will keep on increasing going forward?

Anirudhsinh Jadeja — Promoter & Managing Director

Yes, yes that’s the strategy on which we are working that company is going to have 50% EBITDA from cable side and 50% EBITDA from the broadband side. Yes, we are working towards that and the pace of growth is going to be more in the broadband side.

Rakesh Parikh — Rockstar Capital LLP — Analyst

The last thing I think I missed out in the beginning. Just at 4% is GTPL Genie, what is our game plan and how will it show us a part as such on this platform?

Anirudhsinh Jadeja — Promoter & Managing Director

Genie, we have launched as a B2C product right now of the product which is doing good right now. Somewhere the game plan is to give a bundled product to the consumer, where we can have Cable plus OTT, we can have Broadband plus OTT, we can have all three together plus more services and all. So that’s the plan on which we are working towards, which I just said that how you can bundle and how you can provide all type of services, plus more new services, adding more services on this to the consumer. So that’s the plan on which we are going at. Yeah, margins are healthy on the the OTT side also and we are looking forward that as we go forward those markets are also going to contribute in our business.

Rakesh Parikh — Rockstar Capital LLP — Analyst

And last question I just missed out. This NTO 3, how do you see it impact us on the cable side because incrementally we are losing out to the Internet. side. So your talk on that and will it help us increase our margin also in the revenue per subscriber?

Anirudhsinh Jadeja — Promoter & Managing Director

See, NTO3 I will say it is good for everyone as a stakeholders and all. We are looking forward more transparency in the market on that basis. And yes, it is going to be healthy for us for the details. We are looking forward that as NTO 1 as we got the benefits, we are going to get the benefits in NTO 2 also.

Rakesh Parikh — Rockstar Capital LLP — Analyst

Okay. Thanks, that’s it from me, sir.

Operator

Thank you. The next question is from the line of Ketan Athavale from RoboCapital. Please go ahead.

Ketan Athavale — RoboCapital — Analyst

Hello, thank you for the opportunity. Am I audible?

Operator

Yes, you are audible, sir. Please go ahead.

Ketan Athavale — RoboCapital — Analyst

Yeah, Sir. I just wanted to know on this depreciation, which has increased. So will it persist and what will be the run rate going ahead?

Anirudhsinh Jadeja — Promoter & Managing Director

So basically depreciations [Foreign Speech] because earlier we were in the LAN technology and we’ve migrated completely our network in GPON. So going forward we’ll not deployed that again LAN technology So [Foreign Speech] Because we don’t want to redeploy in the market because we are completely migrate into the GPON format. So basically [Foreign Speech] almost, today we reached almost 90% migration is completed. So [Foreign Speech].

Ketan Athavale — RoboCapital — Analyst

And you said EBITDA growth for FY ’24 13% to 14%, so how is revenue growth looking for two years and EBITDA outlook in ’25?

Anirudhsinh Jadeja — Promoter & Managing Director

So. If you see our old CAGR, we were doing around 18% to 19% of revenue growth and 13% to 14% of EBITDA growth. We are looking forward that from FY ’24 we are going to maintain those CAGR.

Ketan Athavale — RoboCapital — Analyst

Okay. And just one last question. In both of our business individually, what will be the ROE — steady-state ROE?

Anirudhsinh Jadeja — Promoter & Managing Director

ROE is you can calculate it from the balance sheet. We are going to give the annual balance this time. Because investment in cable and you can say broadband is different. So straight we are giving the ROE — possible to give the ROE right now.

Ketan Athavale — RoboCapital — Analyst

Just in steady state over long-term, what it can be according to you?

Anirudhsinh Jadeja — Promoter & Managing Director

If you turn on equity, you can talk about — I’ll come back to you on that because what is return going on right now and how it is going to shape on those.

Ketan Athavale — RoboCapital — Analyst

Okay, sir. You can take that offline. Thank you. That’s it from my side.

Anirudhsinh Jadeja — Promoter & Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Guneet Singh from CCIPL. Please go ahead.

Guneet Singh — CCIPL — Analyst

Hi, sir. Thank you for this opportunity. So, especially are these valuations the company looks like very promising prospect, just like another speaker mentioned about doing a buyback, but — and I heard about the discussions that we had regarding the capex about INR450 crore annually. But one thing that I wasn’t able to understand was that the returns are we expecting on this capex. So for example, if we are spending INR400 crore or INR450 crore annually, like you mentioned about INR50 crore to INR80 crores or INR150 crores, including both broadband and cable are going-for maintenance and technology enhancements and the rest is going for acquiring new customers basically. So I mean if you’re spending INR450 crore annually, this is a simple question, if we spending INR1 crore how much asset turn do we expect on it?

So for example, we are spending INR450 crore annually, can we say that we can expect, say, about 1.5 times, like INR6000 crore addition revenue or what kind of additional revenue do we expect because INR450 crore this year and about INR1,600 crore you mentioned for the coming three years. So the figure goes down to about INR2,000 crore. So can we reasonably say that after three years we then expect an additional revenue of say INR3,000 crore or INR4,000 crore. I mean, that is a simple question from my end. And that’s the only thing that…

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

When you are doing the capex, the asset is there for the long-term, which is say eight to 10 years and you have to see the return on those eight to 10 year. So, first year if we talk about — right now our ROE is going on around 16%. We are looking forward that return on assets at 16% to 170% has to be maintained in the organization because when we look at the return on assets, we look at that the longer time. Because assets is for the over rate. So you can’t say that INR4,500 crores if I did, then my incremental revenue has to INR500 crores or INR600 crores. It has to be in such a novel way that yeah, you get your ROE return on those assets which we are employing and the full access on the ROE side at 16% to 17% which is maintained right now. And we are looking forward that with the time it is maintained or increased.

Guneet Singh — CCIPL — Analyst

Yeah, so we are basically planning to maintain our revenue growth of 18% to 19%, like you mentioned for the coming four to five years, we can say?

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

That’s right, that’s right.

Guneet Singh — CCIPL — Analyst

All right. Thank you. That’s all from my side.

Operator

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

Yash Sarda — Sushil Finance — Analyst

Hello, sir. Sir I can see in the Internet service business the average owning per user has been decreasing since the past two quarters though our number of active paid users are increasing. So could you give us guidance as to going-forward the next one, two years any number of those — numbers which will be stabilizing or do we see a growth happening?

Anirudhsinh Jadeja — Promoter & Managing Director

Yash, can you — your voice was cracking in the first sentence. Can you can you repeat that, the first sentence?

Yash Sarda — Sushil Finance — Analyst

My question is pertaining to the broadband business. So number of active paying users have been increasing since the past two quarters, but the earnings per user has coming down, has been on a downtrend, in Q3 it decreased by 5% and they said there was a loss. So what would be the earnings per user user where we will be hiring steady growth for the next one, one and a half years and how many customers do we plan on adding to the next two years?

Anirudhsinh Jadeja — Promoter & Managing Director

Yeah, so as I said that we are looking forward that the next three years from 920K, 900-K, we are looking forward that we are going to increase somewhere around 40% to 50% of our subscriber base in next two years. That is target which we have taken. The second thing is that you’re talking about margin per users. Margin per user if you see, we have overall we have been maintained that. It’s hardly INR5 here and there and we are looking forward that gross margin is, which is around 40% of our ARPU is going to maintain in the coming year also.

We are working towards the enhancement of our technology and all in such a way that on the same small incremental cost we have, but going to able to serve more and more customers, which we are going to cross 1 million very soon. And the margin of 40% should be maintained on those.

Yash Sarda — Sushil Finance — Analyst

Okay. And just a follow-up question, when the data consumption increases, so how much is unit [Indecipherable] that we are benefiting. Because I think the revenue [Indecipherable] significant increase in the data consumption in the past one year and which is going to increase going forward as well.

Anirudhsinh Jadeja — Promoter & Managing Director

Yeah, that’s one of the direct cost which I will say that as I say that we are doing the technology enhancements in our — In such a way that we are able to manage those data through different technology [Indecipherable] and all in such a way that our margin remains the same. So that’s the technology enhancements. Network management, you can say how you rearrange your network in such a way by investing small amount. So that you save on those increasing of the bandwidth, so because that is one of the technology enhancement which we have to do because as you see data from last two year, it has increased tremendously. But still we are maintaining our margin, that does not pouring into our cost and that’s what we are doing and we are confident that we are continuing to do so.

Yash Sarda — Sushil Finance — Analyst

Okay. Thank you so much.

Operator

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

Rama Manohar — Individual Investor — Analyst

Sir. I have a question that you said that EBITDA will increase 13%, so is it on what we have achieved from INR500 crore or is it FY ’21 number, FY ’22 numbers. Like what is INT567 crore. And also seeing net profit margins. The profit after three years of spending some around INR1,000 capex, profit remained same, whereas revenue [Indecipherable] INR70 crores INR80 crore we have moved to like….

Anirudhsinh Jadeja — Promoter & Managing Director

Manohar I will just say that, as we say that we are going to be close to INR600 crore of EBITDA, that we are trying to achieve in FY ’24, which we missed in FY ’23.

Rama Manohar — Individual Investor — Analyst

Okay, INR600 crore will be like the EBTIDA you are targeting. What about the net profit margins, like depreciation, I’m not sure because whether you are increasing the depreciation or it would be like INR300 crores or INR320 crore or INR400 crores?

Anirudhsinh Jadeja — Promoter & Managing Director

Come again you are talking about, which margin?

Rama Manohar — Individual Investor — Analyst

You said INR600 crores. I’m talking about net profit margin and every quarter depreciation now has reached INR100 crore, is it INR100 crore or is it going to be just INR80 crores again?

Anirudhsinh Jadeja — Promoter & Managing Director

No-no it is going to be INR80 crores because this quarter you are seeing more because of the provision which we have made of INR22 crores for the routers and others equipment, land routers and other equipment’s, which we have taken as conservative accounting.

Rama Manohar — Individual Investor — Analyst

And one more thing that last call you said that the rate of return — rate of investment you’ll get back in 18 months, and now it is — already we have spent around during last three years INR800 crore to INR100 crores of the capex is done, of course some is maintenance capex. Still after spending soo much of amount, our EDITDA remains remains same. So I think we are missing on this.

Anirudhsinh Jadeja — Promoter & Managing Director

And If I go and bring new customer in the Cable TV, the return comes between, you can say 15 to 18 months straight way. Yes, as I say that we are listening around INR50 crores to INR60 crores in the capex to maintain our subscriber base, those INR50 crores to INR60 crores is not giving me any return right now from last two years, okay, Rest of the assets are giving return at the higher rate. And that’s why I’m able to maintain may ROA at 16%. So the rest of the assets which I am deploying is giving us around 22% the 23% return. This INR50 crore to INR60 crore is not giving me any return in average I am coming to around 16% of ROA. So that’s the equation.

Rama Manohar — Individual Investor — Analyst

Sir it’s not able to utilize ARPU in cable ARPU or is it going to increase what about this April 1st you said that I read some newspapers, or even the last Con call you said you will take a call on ARPU increase.

Anirudhsinh Jadeja — Promoter & Managing Director

Yes, already we are implementing the NTO 3. We have started the whole thing from April 15th and already the revised rates and packages have gone into the market. You can find it out in the market. So that’s already we are implementing NTO 3.

Rama Manohar — Individual Investor — Analyst

Yeah, that is my concern, because the telecom players, mobile player every family I think there ARPU went up by INR100 [Indecipherable] GTPL is struggling to increase in INR10 INR20 ARPU. I think that is one anomaly and then how, because that is I think the business — because we have competition from OTT whatever it and then even TATA sky, TATA Play they are entering the broadband and security business, because I see Cable TV business may go out of the market in three-four years or five years.

Anirudhsinh Jadeja — Promoter & Managing Director

So I’ll come on that, first on the increase. Yes, increase you can say are revised prices impacted us already in the market from April 15 from the morning and we are looking forward that have NTO 1 helps us the whole and NTO 3 will also going to help us, first thing. Second, [Indecipherable] cable TV, that will be obsolete in three two-three years back, we don’t agree. Cable TV is going to be there and we’re going to grow the growth as per the belief of the management. Yes, the bundling of the product, which I have already talked about that you have to bundle. We are also in the broadband. We are also doing the OTT, we are doing the entertainment in the Cable, we have to bundle that.

I have also talked about, we have introduced more services which is the requirement of the customer, which already lot of things we are rolling also and you will come to know on this year. So it’s going to be not only three bundled services, more bundled services which we have to satisfy every need of the customer as we say that we look ourself as a pipe, which has every answers to that households and that’s the strategy on which we are working and we look forward to launch all those things in this FY ’24.

Rama Manohar — Individual Investor — Analyst

Lastly, one or two housekeeping questions, like increasing the ARPU will result in increase in margin or just lost i[Indecipherable]

Anirudhsinh Jadeja — Promoter & Managing Director

Yes, if ARPUs is getting increased the margin will increase.

Rama Manohar — Individual Investor — Analyst

But not sure to what extent our profit margin will increase, right?

Anirudhsinh Jadeja — Promoter & Managing Director

Again, the next quarter will come. We will talk more about this in the next quarter. We are seeing seen some of the results.

Rama Manohar — Individual Investor — Analyst

One last question is that. You said that the I want my company to focus more on broadband, okay, now you are saying the broadband I think that our 9 lakh customers your aiming for 40%, 50% growth. I think that too for next three years, right?

Anirudhsinh Jadeja — Promoter & Managing Director

Yes.

Rama Manohar — Individual Investor — Analyst

Don’t you think it is a small increase because that is happening here and then we are this year I think we did very bad. I think only, of course, Cable TV is — company did good whereas coming to broadband it is just INR25,000 quarter and last two quarters you said that a customer — B2B customers INR70,00 something. And that also did that happen this quarter. So what is that you are clearly aiming for next one year broadband because I think there is the more scope for increasing the business, you can convert from cable tv to broadband.

Anirudhsinh Jadeja — Promoter & Managing Director

Broadband side, if you see everywhere you talk about the competition and everyone, the growth which we are doing is at same level of growth which other companies are doing right now. We are better than some of the company. So that growth is going to maintain and that’s going to enhance as we go forward. The B2B side of the business, yes, you are right that because of some technology here and there mismatch and others, we are not able to do significant things in quarter four which we were expecting. And that is one of the reason that you are seeing our EBITDA breakdown because that contribution has not come in FY ’23, but we are hopeful that FY ’24 we are going to get the B2B subscriber. Whatever projections I have given you on next two years is just for the B2C. I have not included the B2B for that.

Rama Manohar — Individual Investor — Analyst

Thank you.

Operator

Thank you. The next question is from the line of Saket Kapoor from Kapoor Company. Please go ahead.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Yes, a very small point, sir. You mentioned we will be going back to the EBITDA number closer to INR600 crore for FY’24. This is what is correct sir?

Anirudhsinh Jadeja — Promoter & Managing Director

Yeah, around.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

So we were in the vicinity of INR555 crore, INR560 crore for FY ’22 and that if we keep that as a base, this being an annual year because of the non-cash item this will be — We will have a growth of 10%.

Anirudhsinh Jadeja — Promoter & Managing Director

Yes, you’re right on that way because the main reason is on that INR550 crore around, if you’re talking about FY ’22, around INR70 crores of revenue — NR70 crores, NR75 crores was of activation revenue, which was more like a default non-cash revenue. That’s what I say that activation revenue is a non-cash, it is not affecting our cash generation capability and all, but it was contributing in the EBITA which has gone away. So if you take away that, it is like some INR480 crore, I am talking about INR600 crore. So it’s more of like in two years time around 22% to 23%, 24% which is more of what we’re talking about our CAGR.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Could you please explain this Activation revenue part of the deferred part, I didn’t get it correctly. What is the nature of the same and why would — it appeared earlier and will not be a repeat item.

Anirudhsinh Jadeja — Promoter & Managing Director

Yeah, Activation revenue is more of which are at the time of dash when we are deploying our STBs first time in the market, we collected it from the customers. INR700, INR800, INR1,000 from the boxes, which has got deferred for five years. So if you see the whole phase 4 which has happened from 2017, 2018 and till 2019 mid you can say, both revenues of deferred revenues was appearing in our books. And in that we have to do the deferred for five years of those revenues. So those revenues which we have generated the cash on those years is part of the P&L which is going away now.

[Foreign Speech] that is implemented in India 2012 Phase 1, Phase 2 is 2013, and Phase 4 it is up to 2017 [Foreign Speech] more than almost 150 millions set-top box implemented. Where as let’s say, take an example like GTPL itself is almost 10 million customers [Foreign Speech] Phase 3 was 2017, but it was extended till 2019, somewhere 2018 end.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

[Foreign Speech]

Anirudhsinh Jadeja — Promoter & Managing Director

That is not going to the part. That is going to be a very small amount, very-very small amount of that.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

[Foreign Speech] this will be earning annuity on the same or on this is what the infrastructure we have laid out and we have booked the revenue and the profit on same. Are these IPG1 type FX?

Anirudhsinh Jadeja — Promoter & Managing Director

You are talking about JFJNL.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

No-no, sir, I’m talking about our slide number 4 wherein we have mentioned about our network in infra of 97,000 kilometer of optic fiber and we have done work for BharatNet project for join me in connecting 3700 gram panchayat and then the OEM part. So are these clubbed under the IPB1 asset.

Piyush Pankaj — Business Head, CATV & Chief Strategy Officer

This is my own 97,000 kilometers, which is I own it in different, different parts of the country, where I put in my own optical fiber. This is not [Indecipherable] this is owned by Government. That is owned by Government, which I have created the assets in last 15, 16 year.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Correct, are these the IPB1 one asset, the infrastructure asset wherein you will earn an annuity on the same just like [Indecipherable] to be other players too.

Anirudhsinh Jadeja — Promoter & Managing Director

No no, no, it is not like that. I can lease these to different parties. But this is more on my B2B customers and for B2C customers. That’s right.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

And in your presentation is at one point was mentioned about this broad speaking video streaming solution. I’m missing on which slide it was mentioned. So if you could give us some more color what are you conveying by this and what is the differentiation and how will this contribute to the revenue part?

Anirudhsinh Jadeja — Promoter & Managing Director

So this is a basically it’s a technological solution whereas it’s a CDN technology solution where you can deliver your content very easy way and very smooth way. So next time if you want this in detail technology side, I’ll ask my CTO, he’ll give you a guidance.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

And last point on the. Out-of-the employee costs sir, what is the payment to the KMP, how much have been — is there fixed-cost or also a performance bonus that is being paid under the employee benefit expenses?

Anirudhsinh Jadeja — Promoter & Managing Director

On the KMP side, yes, around 15% of salary is on the bonus side on the performance-based, 85% is the fixed.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Okay, so out of this INR145 crore, what is the contribution to the KMP on an annual basis?

Anirudhsinh Jadeja — Promoter & Managing Director

We can take it offline.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

[Foreign Speech] And lastly a small point on, the smart TV is now being the order of the day and they are getting bundled up with our mobile phones and the Internet are getting more more WiFi to it. So how do you see that advent on more technological advancement in terms of smart TVs taking foray. How are you seeing this Cable business will survive and will get [Foreign Speech]

Anirudhsinh Jadeja — Promoter & Managing Director

So basically [Foreign Speech] GTPL is also doing understanding with the lot of television vendor. We’ll come to know in quarter one or quarter two [Foreign Speech] we’ll let you know coming either quarter two or quarter three. So that is one part.

The second part is, as more-and-more smart TV will come we are happy because people are moving towards the HD side. So the quality of HD or 4K, which all those things is going to give us the boost on our side. Because the HD quality if you don’t have very-high broadband connections and all it always gives you trouble. In our case, HD quality is easily delivered on the Smart TV and all and that is going to give us more chance to do the marketing to those clients.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

So just to summarize, it is going to be good customers experience going ahead, you are putting up technological upgradation, client acquisition, but [Foreign Speech] That is both for the promoter as well as the non-promoter entity. So how is the valuation going to improve and how our investors. In the long-run going to benefit from the type of capex and the money spent, definitely it will create the infrastructure you are going to provide customers the right experience at the right price, but how do you take a look after your investor [Foreign Speech].

Anirudhsinh Jadeja — Promoter & Managing Director

See as a management of GTPL, if you see, whatever we have promised IPO time and throughout the years we are including those in the business aspects, and we continue to do so. If you talk about the shareholding side that how it is going to get impacted and how the valuation because if we believe as a management, the valuation should go up because we are doing good in the business, our returns are increasing, everything is increasing. So we should have a good value, the whole which we believe as a management. But yes, restructuring, obviously, you can say how the shareholders has to look into that. I will say we will take that vibes off our investors only individually that what we should do, so which we should [Indecipherable] our Board on which we should refer into our shareholders that we should do so that the valuation should go up. So I will say that we will take that feedback from investors individually and will then take to Board and the shareholders on that.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Yes, and you can also engaged on that, that can get you because if you look at the all-time high it was around INR300 or INR296. That was the topline way back in October ’21. And we have now down, if there is no corporate action taken we are down to INR100 today. On-top of spending money, having more debt, there has to be the reason why market is not well in the Company. So that needs to be done

Anirudhsinh Jadeja — Promoter & Managing Director

Yeah, as a management we are also concerned on that that the prices are at the lower side as it is coming to down. We have to look that — see as a management, we can do our business, on the business side we can improve our things and all, perception creation and [Indecipherable] what we can do in the market all it is we like to have our investors to tell us or advice us so that we can.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

I won’t harp more on it, but you are the largest shareholder. So whatever value creation will happens will be top down only. So that is the 3/4 on the promoter and the remaining 1/4 from annuity shareholders. So whatever steps you will take it is not only we’re going to go for your minorities shareholder, but will come down-top down from the promoter to the non promotor. So Kindly look into the asset and the reason there — also the purpose of them remaining listed there when value cannot be created for your investor. That’s all from my side. Thank you.

Anirudhsinh Jadeja — Promoter & Managing Director

Sure, we look forward to that and we will talk individually

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Yes sir, thank you, sir.

Anirudhsinh Jadeja — Promoter & Managing Director

As a company, we will do better and better, the share price will go better also.

Saket Kapoor — Kapoor Stock Brokings Private Limited — Analyst

Thank you sir. All the best, sir.

Operator

Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you, sir.

Anirudhsinh Jadeja — Promoter & Managing Director

I would like to thank the participants for taking out time to join our earning conference call. We look forward to having continuous engagement with all the market participants. For any queries, please feel free to connect with Orient Capital, which is our IR advisors. Thanks. Thanks, and have a good evening.

Operator

[Operator Closing Remarks]