GTPL Hathway Ltd Q2 FY24 Earnings Conference Call Insights

Key highlights from GTPL Hathway Ltd (GTPL) Q2 FY24 Earnings Concall

• Financial Performance
  • The company reported strong financial performance for Q2 FY24, beating previous quarters.
  • Revenue grew 19% YoY to INR7,900 million.
  • Consolidated EBITDA was INR1,351 million with 17.1% margin.
  • Profit after tax stood at INR344 million.
• Subscriber Growth
  • Added 800K digital cable TV subscribers YoY, total now 9.4 million.
  • Paying cable subscribers increased 400K QoQ and 700K YoY, now at 8.70 million.
  • Broadband subscribers reached 990K, up 120K YoY, a 14% increase.
  • Homepass subscribers grew 550K YoY and 150K QoQ, now at 5.55 million.
• Margin Improvement
  • Margins improved from 16.1% to 17.1% in Q2.
  • Cost increases have stabilized after NTO 3 implementation.
  • Expect to achieve 20% EBITDA margin target by Q4.
  • New projects will help drive margin improvement.
• Pay Channel Costs
  • Pay channel costs increased in Q1 and Q2 due to NTO 3.
  • These costs have now stabilized and will not increase significantly going forward.
  • Revenue growth expected to outpace any increase in pay channel costs.
• Broadband Business Growth
  • Broadband revenue was INR1,317 million, up 10% YoY.
  • Average broadband ARPU was INR 460 with 25% higher data consumption YoY.
  • Added 30k broadband subscribers in Q2.
  • 25k were B2C, 5k were B2B.
  • Growth slowed to 10% vs 15-20% previously.
  • Expect growth to return to 15% rate.
  • Focus is on volume gains rather than price increases.
  • ARPU has remained steady around Rs. 450-460 range.
  • Significant headroom for growth in India with low broadband penetration currently.
• Depreciation and Interest
  • Increase in Q2 due to consolidation of MetroCast.
  • Led to higher depreciation and interest costs.
  • Current levels expected to remain steady going forward.
• Cable TV Business Growth
  • The cable TV business is still growing for the company even though the industry may be stagnant.
  • The company is consolidating and grabbing market share from smaller MSOs.
  • There is still growth in the TV industry with new TV sales and 100-150 million households without a TV.
  • The company’s cable TV subscription revenue has grown 8% in Q1 and Q2
• Broadband Outlook and Expansion Plans
  • Broadband subscribers are expected to reach 1.05-1.07 million by year end.
  • New innovative products can attract more customers, especially from social media and the youth demographic.
  • Looking to expand to 1 more state and 2 more union territories in the next 2 quarters for cable business.
  • Main focus for broadband expansion is B2B, looking to expand presence from current 9 states to all states where cable business is present.
  • Specific strategies differ by state based on dynamics, number of players, packages etc.
• Guidance
  • Aiming to get back to historical revenue CAGR of 18-20% for cable and 15-16% for broadband over next 2 years.
  • Targeting EBITDA growth of 12-13%.
  • Expect to cross 10M cable subscribers this year and add 1-1.5M more over next 2 years.
  • Expect to reach 1.2-1.25M broadband subscribers driven by B2B business.