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.