GTPLNSEQ2 FY2023October 21, 2022

GTPL Hathway Limited

3,802words

56turns

6analyst exchanges

4executives

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Management on call

Pulkit Chawala

EMKAY GLOBAL FINANCIAL SERVICES LIMITED

Anirudhsinh Jadeja

PROMOTER & MANAGING

Piyush Pankaj

BUSINESS HEAD (CATV) & CHIEF STRATEGY OFFICER

Anil Bothra

CHIEF FINANCIAL OFFICER - GTPL HATHWAY LIMITED

Key numbers — 40 extracted

10%

dband service in Gujarat. The company has registered a strong performance in H1 FY2023 by growing 10% revenue; efforts are being made towards aggregating smaller MSO and additionally expanding the br

8.6 million

Hathway for Q2 and H1 FY2023. Our active CATV subscriber base as on September 30, 2022, stands at 8.6 million. Paying subscribers for CATV stands at 8 million. On Y-o-Y basis the increase in active and payin

8 million

ber base as on September 30, 2022, stands at 8.6 million. Paying subscribers for CATV stands at 8 million. On Y-o-Y basis the increase in active and paying CATV subscribers is 550k and 650k, respectively

5 million

scribers on a Y-o-Y basis and 25k new subscribers on a Q-o-Q basis. Homepass subscribers stood at 5 million as on September 30, 2022, of which 75% are available for FTTX conversion. The Broadband ARPU fo

75%

bers on a Q-o-Q basis. Homepass subscribers stood at 5 million as on September 30, 2022, of which 75% are available for FTTX conversion. The Broadband ARPU for Q2 FY2023 stood at Rs.450. The average

Rs.450

, 2022, of which 75% are available for FTTX conversion. The Broadband ARPU for Q2 FY2023 stood at Rs.450. The average data consumption per customer per month stood at 300 GB registering a 33% increase Y

33%

tood at Rs.450. The average data consumption per customer per month stood at 300 GB registering a 33% increase Y-o-Y. This segment continues to grow as data consumption is increasing due to push for

Rs. 6,620 million

rmance: On a consolidated level excluding EPC contract in Q2 FY2023, revenue grew by 10% Y-o-Y to Rs. 6,620 million. The CATV subscription revenue stood at Rs. 2,751 million. The broadband segment delivered robu

Rs. 2,751 million

Q2 FY2023, revenue grew by 10% Y-o-Y to Rs. 6,620 million. The CATV subscription revenue stood at Rs. 2,751 million. The broadband segment delivered robust growth of 19% Y-o-Y and revenue stands at Rs. 1,198 milli

19%

subscription revenue stood at Rs. 2,751 million. The broadband segment delivered robust growth of 19% Y-o-Y and revenue stands at Rs. 1,198 million led by healthy subscriber additions. Consolidated E

Rs. 1,198 million

. 2,751 million. The broadband segment delivered robust growth of 19% Y-o-Y and revenue stands at Rs. 1,198 million led by healthy subscriber additions. Consolidated EBITDA for the quarter stood at Rs. 1,383 mil

Rs. 1,383 million

. 1,198 million led by healthy subscriber additions. Consolidated EBITDA for the quarter stood at Rs. 1,383 million with a margin of 20.9%. Our continuous efforts to deliverance our balance sheet and maintaining o

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Guidance — 9 items

Piyush Pankaj

opening

“We expect to grow our digital cable TV business by aggregating smaller MSOs and additionally expanding the broadband penetration to digital cable TV base.”

Piyush Pankaj

“We are still maintaining that we will do 1 million per annum which is the target on which we are working towards.”

Piyush Pankaj

“Already on a Y-o-Y basis 650k we did we have to do more around 0.5 million to 600k more in this year and we have to continue that trend going forward also.”

Pratiksha

“How about homepasses like do we have any target set out here, I think last two quarters H1 per se we have done 30,000 so how do I look at growth plan here on homepass basis?”

Raj Ojha

“I have a couple of questions, first question is related to subscriber base, so I just wanted to understand how do we plan to increase our broadband subscriber base and especially which area we will be targeting for coming quarters or a year?”

Raj Ojha

“I have one last bookkeeping question like we have been generating good cash flow and we have got out of the EPC business so I just wanted to understand now what will be the impact of this on our EBITDA margin going ahead?”

Piyush Pankaj

“EBITDA margin is going to improve as on that EPC we are just making the EBITDA of around 8% to 9% and now as EPC project is not there then the regular businesses which is at EBITDA margin of more than 20% that is going to help us in the EBITDA margin.”

Piyush Pankaj

“For this year I will say the recurring capex will be around for the 400k boxes which is around, the total capex it is going to be around 22%, but general it is going to be somewhere between 12% to 15% on the CATV side.”

Akshay Jain

“One more question I am seeing that the segmental PBT is improving with the contribution from the broadband segment so going forward what is your guidance for the current financial year and the next year on this?”

Risks & concerns — 2 flagged

If you could just elaborate a little about the growth plan in subscribers in this business because we have seen very volatile trend here and also if you can comment on the gross addition and net addition and on its quarterly trend?

— Pratiksha

I have one last bookkeeping question like we have been generating good cash flow and we have got out of the EPC business so I just wanted to understand now what will be the impact of this on our EBITDA margin going ahead?

— Raj Ojha

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Q&A — 6 exchanges

Good evening, thank you for the opportunity. My first question was on the cable TV side we have been seeing some softening of ARPU since a couple of quarters now so just wanted your view on the outlook on ARPU here?

Piyush Pankaj

Yes, ARPU you can say that it is at the same level that it was earlier, we are not able to increase the ARPU and we are looking forward that we are going to increase the ARPU. As we are entering into new markets and still we are maintaining our ARPU at the same level because at present we are entering into the market where the average ARPU is less than our average ARPU on those markets, but we are increasing our ARPU in our current market so that we can maintain our same ARPU, but once we are going to stabilize in the new market we are going to take up the ARPU. So, I will say a Y-o-Y basis yo

Good afternoon, thanks for the opportunity. I have a couple of questions, first question is related to subscriber base, so I just wanted to understand how do we plan to increase our broadband subscriber base and especially which area we will be targeting for coming quarters or a year?

Piyush Pankaj

Thanks. Raj. Threefold strategy is there - one strategy is the B2C strategy which we are doing right now; 25k or 35k which we have seen in the last six months is mainly B2C subscribers and that is going to continue. The second strategy is in the rural Gujarat side where we have to expand. Right now, we are at 110 cities only in Gujarat presence and in cable side we have presence of around 400 cities, so we have to expand on that plus we are going to leverage GFGNL infrastructure which we have laid for the government and penetrate in that Gujarat side. The third strategy is your B2B segment whi

Thank you for this opportunity. I just have one question, what is the amount of recurring capex and the amount of new capex incurred for growth in CATV as well as broadband business for the first half FY2023?

Piyush Pankaj

Recurring capex is mainly in the CATV side, main capex is your STBs. If I say the replacement STBs which we have to do from the new boxes, or which is in the warranty period and all which you can say as a recurring it is not more than around 200k or 250k in a year; the rest is for the new subscriber base which we are incurring. So, if we are purchasing around 1.5 million boxes out of that 1.3 million boxes or 1.25 million boxes is going for the new capex, new subscriber base hardly you can say 15% is going on the recurring side. The same trend is on the broadband where we have to do the replac

Sir, I just had a few questions, we have increased receivable and even payables are higher compared to H1 last year just wanted to know the reason for the same?

Anil Bothra

The total receivables are Rs. 3,565 million if I compare these receivables with September of FY2022 it is almost around Rs. 3,226 whereas if I compare this from Q4 or March 31, 2022, it is Rs. 2,836. So, increase is cyclical in nature which is actually predominantly from the marketing and carriage receivables and the same amount of payables are also going up. So, it is a kind of the arrangement between the marketing and carriage parties and the pay channel parties. So, it is a contra kind of entry and if you look at the trade payables on September 30, 2022, it is Rs. 5,864 and the Q2 of last y

No, we are looking forward to expand all over India as we are already in 19 states, and we are looking forward to enter into a few more states and so we are looking forward for acquisitions in all the states where we are present. Wherever the opportunity is coming we are going ahead with that and in Q3 and Q4 you will see that some big acquisitions will come into our side. Dharmavenkatesan K B: I was late to join the call, so if this question was asked so pardon me is there any update on the court cases that we were having or is it still at the same stage?

Piyush Pankaj

No, it is still under the same situation, there is no movement on that. We are looking forward I think one good case is happening in the first week of December. I think it was in Supreme Court. So, we are hopeful that some movement will happen at that point of time. Dharmavenkatesan K B: As far as I understand that we have a precedent in this case which actually means that we do not have to pay the fine, so that is how it is still there, right or is my understanding wrong? No, your understanding is right, you can see our notes both number seven and eight in our results we have given and put it

Thanks everyone for joining the earnings call and we look forward to again interact with you on the next quarter results, in the Q3 results. Please be safe and healthy. Thanks a lot.

Management

Speaking time

Piyush Pankaj

Pratiksha

Moderator

Raj Ojha

Karan Mehta

Akshay Jain

Pulkit Chawla

Anil Bothra

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Opening remarks

Pulkit Chawla

Thank you Michelle. Good evening, everyone. I would like to welcome the management of GTPL Hathway and like to thank them for this opportunity. Without further delay I shall now hand over the call to the management for their opening remarks. Over to you gentlemen! Anirudhsinh Jadeja: Thank you Pulkit. Good evening, everyone. I am pleased to welcome you all to our Q2 and half year ended FY2023 Earnings Conference Call. Your company GTPL Hathway is driven by the very purpose of being present at your service through its digital cable TV distribution and high-speed broadband products offering. Halfway into 16th year of our operations, I am happy to share that we continue to be number one service provider and digital cable TV service in India and for broadband service in Gujarat. The company has registered a strong performance in H1 FY2023 by growing 10% revenue; efforts are being made towards aggregating smaller MSO and additionally expanding the broadband penetration. The Broadband segmen

Piyush Pankaj

Thank you Mr. Jadeja. Good evening, everyone. I hope all of you are safe and healthy. I am pleased to announce the business and financial performance of GTPL Hathway for Q2 and H1 FY2023. Our active CATV subscriber base as on September 30, 2022, stands at 8.6 million. Paying subscribers for CATV stands at 8 million. On Y-o-Y basis the increase in active and paying CATV subscribers is 550k and 650k, respectively. We remain the largest MSO in India riding on our quality services and consumer-centric products and services. We expect to grow our digital cable TV business by aggregating smaller MSOs and additionally expanding the broadband penetration to digital cable TV base. In the broadband business we added 135k new subscribers on a Y-o-Y basis and 25k new subscribers on a Q-o-Q basis. Homepass subscribers stood at 5 million as on September 30, 2022, of which 75% are available for FTTX conversion. The Broadband ARPU for Q2 FY2023 stood at Rs.450. The average data consumption per custome

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