1. UBS bullish on Hathway Cable shares after strong Q2 results

UBS bullish on Hathway Cable shares after strong Q2 results

Global research and brokerage firm UBS is bullish on the shares of Hathway Cable and Datacom Ltd after the company posted a net profit of Rs 14 crore in the quarter ended September 30th 2017.

By: | Published: November 3, 2017 10:30 AM
UBS has a target price of Rs 50 on the shares of Hathway Cable and Datacom Ltd. (Image: Reuters)

Global research and brokerage firm UBS is bullish on the shares of Hathway Cable and Datacom Ltd after the company posted a net profit of Rs 14 crore in the quarter ended September 30th 2017, as against a net loss of Rs 40 crore in the previous quarter. Hathway Cable and Datacom standalone revenue for the quarter came in at Rs. 131 crore, registering a 59.2% yoy decline. EBITDA for the quarter fell by 1.5% yoy to Rs. 52.6 crore with a corresponding margin expansion of 2352 bps. EBITDA margin for the quarter stood at 40.1%. Notably, the margin expansion was primarily aided by absence of pay channel cost during the quarter as against Rs 103.4 cost in corresponding quarter in the last fiscal.

Track live stock price: Hathway Cable and Datacom Ltd

UBS has a target price of Rs 50 on the shares. Hathway Cable and Datacom Ltd shares surged by more than 19% and were trading at Rs 38.15 this morning. UBS’ target price implies an upside of more than 31% from the current market prices. Notably, the shares have yielded negative returns in the year so far, even as the BSE Smallcap index is up by more than 47% in the year so far. UBS says that a pick-up in subscriber addition will be a key factor to revenue growth.

In April this year, the cable television and broadband internet service provider said that it will spend nearly ₹500 crore in the next three years to offer high-speed broadband and wired Internet. According to Rajan Gupta, Managing Director, Hathway Cable, the company is targeting a customer base of 5 lakhs. “Consumption of content like Netflix, Amazon Play, HOOQ and Voot, and with e-commerce and communication moving online, the need for high-speed and unlimited data download has created a huge demand for wireline fibre broadband,” Rajan Gupta he said back then.

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