GTPL Hathway Limited (GTPL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the GTPL Hathway Limited Q1 FY '27 Earnings Conference Call hosted by Emkay Global Financial Services Limited. [Operator Instructions] Please note that this conference has been recorded. I now hand the conference over to Mr. Aryan Tripathi from Emkay Global Financial Services Limited. Thank you, and over to you, sir.

Good evening, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Anirudhsinh Jadeja, Promoter and Managing Director; Mr. Piyush Pankaj, Business Head, B2B, CATV and broadband and Chief Strategy Officer; and Mr. Saurav Banerjee, Chief Financial Officer. I shall hand over the call to the management for the opening remarks. Over to you, gentlemen.

Thank you. Welcome to the call of GTPL Hathway Limited to discuss financial performance of the first quarter of FY '27. As the country's largest MSO, we continue to take initiatives to further trend our presence across the digital TV and broadband businesses. We appointed Mr. Riverina as our new broadband business CEO to have a focused approach and lead growth in B2B and B2C segments. Both our Digital TV and broadband ministers continue to demonstrate regimen and consistent operating performance. With the launch of [indiscernible], or platform in FY '26, the recent actuation and the recent acquisition of the ATB Group's basically the new delimiting business. We are strengthening our platform for future growth and enhancing our ability to scale efficiently across key markets. The 4 details of the acquisition will be shared by Piyush Pankaj. Thank you. Now I hand over the call to Piyush Pankaj, who will take you through the API on Digital TV and broadly segment.

Thanks, Mr. Jadeja. Good evening, everyone. Let me begin with giving you an overview of the key highlights of this quarter. GTPL Hathway Inter inter business transfer agreement to acquire the digital business of 7 ST group companies for an aggregate cash consideration of INR 36.23 crore and which is expected to get completed by 15 September 2026. The transaction is expected to add approximately 6 lakh digital TV subscribers across Andhra Pradesh, Sevangana, Odisha and Kannada market. Thereby strengthening our presence in key southern and eastern markets and supporting our strategy of expanding the digital TV business through both organic and inorganic growth. This acquisition will give us leadership position in Andhra Pradesh and Talara, which will help us to trigger the significant benefits for revenue consolidation and cost optimization. We are pleased to report that we entered 2 new strategic markets in quarter 1 FY '27, namely state of Kerala and Jammu and Kashmir. By entering the Kerala state, we have expanded our presence in all other markets. Now the KPIs for our digital TV and broadband business are as follows. First, Digital TV segment. Our digital TV subscriber base as of 30 June 2026, it stood at 9.62 million, among the total subscriber base, paying subscribers stood at 8.9 million. The total business partners count now stands at more than 51,000 and they remain instrumental in fueling our nationwide expansion delta. In the broadband business, active subscriber base at the end of the quarter stood at 1,060. 1-0-6-0, 1.06 million, adding 10,000 new subscribers on a Y-o-Y basis. The broadband ARPU was quarter 1 FY '27, it stood at INR 470 increased by INR 5 as compared to quarter 1 FY '26. Average data crustiform stood at 4 GB per user, a 6% increase Y-o-Y. As we move forward, we remain committed to accelerating our expansion across new states, broadening our total addressable market and advances our vision of becoming a truly panelists TV and potency. Thank you. I will now hand over the call to Mr. Saurav Banerjee, CFO who will take you through the financial performance of the company.

Thank you, Mr. Piyush. Good evening to all the participants. For the quarter on a consolidated basis, our total income grew by 12% year-on-year and 9% on a quarter-on-quarter basis, INR 1,020 crores. Subscription revenue saw an increase of 2% sequentially to INR 291 crores. The broadband revenue stood at INR 143 crores and registered a growth of 5% on a yearly basis and grew marginally by 2% sequentially. Consolidated EBITDA to INR 109 crores with an EBITDA margin of 10.7%. Net profit for Q1 FY '27 stood at INR 2.3 crores. Now looking at the stand-alone performance for the quarter. Our total revenue grew by a healthy 16% Y-o-Y and 12% sequentially to INR 693 crores. Subscription revenue saw an increase of 2% Q-on-Q INR 206. Stand-alone EBITDA stood at INR 64.4 crores with an EBITDA margin of 9.3%. Net profit for Q1 FY '27 stood at INR 1.9 crores on a stand-alone basis. Overall, our consolidated operating EBITDA stood at INR 101 crores in Q1 FY '21 registering and operating margin of 22%. I would now request the moderator to open the floor for the Q&A session.

[Operator Instructions] We take the first question from the line of Saidal Agarwal from [indiscernible] Advisory.

Congratulations on the quarter. So my first question [indiscernible].

Sorry to interrupt you, I would request you to come closer your device.

Am I audible now?

Yes. Please, go ahead.

Congratulations on the quarter. So my question is on the acquisition. So I think degrading progresses would you consider the milestone research to monitor for the coming months, like to evaluate whether this acquisition would be delivering the expected returns.

Yes. So in SP integration, you can say that we have around 6 lakh subscriber base, which we are looking forward to integrate and the whole agreement is going to get closed by September 2026. So the full effect of that will start coming the mid-quarter, quarter 2 and then the next quarter in quarter 3, which we will start seeing. And you will see that the number of subscribers has to go up by banks. And plus, it will enhance our revenues and it will be accretive to our EBITDA. So those things will -- you will start seeing it in calls also, we will give you the figures that how it is contributing to our overall business. The [indiscernible] business.

And like most see the benefit would be coming through operating leverage also revenue [indiscernible].

The benefits will come on becoming a radar market leadership, having a market leadership in Amantadine market, which will give us the synergy benefits as we have presence over there, and we are taking over this. We are going to be market leader and that we feel has a better operating margin in that market.

Okay. One more question, like broadband OnePath expanded an over the last quarter. So all the subscriber additions have been related to model. So going forward, like is your priority to improve utilization of the existing network or you would be continuing to expand the whole past footprint.

Yes. So the strategy in broadband is still date. We are not increasing our home passes, and we are going for the extraction of the subscriber base on that because every day, if you see the percentage is at around 17% -- 16% to 17% is the restructured rate right now, which we want to go up to around 20% to 20% on this. . But yes, as in my statement, we say that we have recruited our new CEO for the paper business. And we will have more focus on how we can expand all over India and increase our business in the drug market. And we are going to invest in increasing our home pass also and create more infrastructure of the future business versus continue fees. So the focus will be back totally on the broadband business, that's how we can expand that. And that is one of the main reasons that CO has been recruited and put it in the place to fuel that growth.

We take the next question from the line of Suhani Singh from SK Capital.

My question was with regards to the financial performance of the company. So despite the revenue growing 12% year-on-year 2020. The PAT declined sharply to around INR 2.3 crores. So could you help me understand the key reasons for this divergence between top line growth and profitability and which operating factors created the biggest pressure during the quarter.

Yes. So you're right, PAT has decreased around INR 8 crores Y-o-Y POC. And this is mainly because of higher depreciation and finance cost, if we go through the old credentials, you will see that the depreciation and the finance cost has gone up by around INR 6 crores. And that is because of the capitalization of right-of-use assets related to its infrastructure in line with the counting standards and conservative accounting practice. The company has taken the full cost and capitalization of its but the cost savings and other operational benefits related to it will start growing in future quarters, which will show positive effect impact in coming quarters. And -- but if you see the company is maintaining the operational margin and the margin will increase on the full benefit of it platform will be metallized. So we have taken all the costs regarding that it's on the capitalization and other costs, which is on the transport cost anything. But still as the Its implementation is going on, the benefits of it and the savings due to the pay to come into the books. And that's why we are seeing that difference in the PAT, you see at the EBITDA level, it is just INR 3 crores down. But at the back level, it is INR 8 crores down.

Okay. So how much of the margin pressure is structural versus one-off. So can we expect margin to improve during FY '27?

Yes. So the operational margin, which is affect 22%, which we have shown that will go up to 35%. And that will help us in increasing our EBITDA and back both to the side.

Okay. That helps. Also, the homebound stands at $5.95 million, with around 75% FTTX. By the overall for trend appears to have remained broadly stable for the past few quarters. So could you tell me the pace that with GTL expects to convert this existing footprint into paying broadband subscribers? And what are the key month mix to the accident rate income margin?

Yes. We are looking forward that out of the $6 million, $5. 95 million home pass, you should have 20% to 21% commercial rate extraction rate. That should be there, which we are trying to achieve. Plus now we are going to invest back into the increasing our home passes. And there also, we are expecting that the LV extraction rates should be 20% to 21%. So that's what we are aiming for, and we are looking forward as we are going to be more aggressive in the market.

So my next question was related to the recent acquisition. Could the management elaborate on the key synergies expected from the acquisition of the Citi Group Digital TV businesses. And specifically, how should we think about the potential benefits in terms of market expansion, cost efficiencies and for selling opportunities?

See on reputation with the [indiscernible] market, if I can see, we already have more than 1 million sets. And adding the 6 lakhs, we are going to cross somewhere around 1.6 million, 1.7 million subs, which is -- we are going to be the largest player in that market. And that is going to help us in expanding also expansion also. We're going to have a much, much better synergy synergies in that market, and that grew 2% operational synergies and vendor synergies we can have that is going to give us more margin in that market. So that's the benefit we will start seeing in the upcoming quarters as we win closed that on September '26, which we have to go back on 15,000 before that. So you will start seeing that effect in our unit also. And as I said, that if you inform the recall that how it is progressing and got more benefits we are getting out of this liquidation.

So can you shed more light on what contribution are we expecting on the venue and FDA from this acquisition?

Right now, we don't want to do it. First, the integration happens and the crores as this is getting closed by 15 September that we announced in public. So before that, we don't want to keep any figures at yes. in the next call, we will take all the figures, and we will start getting it in the results.

One last question. So what is the planned CapEx for FY '27 across broadband expansion [indiscernible], IDS infrastructure and creation of acquired assets?

Yes. So that's -- right now, we have compared around INR 400 crores for this financial year, the CapEx, where it is going to be around 50% for [indiscernible] 50% for Digital.

We take the next question from the line of [indiscernible] from [indiscernible] Investments.

Am I audible?

Yes, you're. Go ahead.

All right, yes. Sir, my first question was, how do you increase upsell to the higher tiers in Cable TV and broadband.

[indiscernible], sorry, your voice was [indiscernible].

Yes. My question was, how do you get upsell to higher tiers in Cable TV and broadband?

You're talking about upsell? .

Yes, yes. Absolutely, yes. Am I audible?

So actually, we are trying to bid projects in a few cities regarding this combo that you're in your referring to regarding the Cable TV and broadband. So far, there is a good sign obviously because eventually, the idea is to bring them together and increase the broadband subscribers built with the kind of number of Cable TV we have. So I mean, not exactly deliver plan, but it's so far looking as a good sign.

So we have marked the combo products already, it is now stable and that is doing very good. And that combo productive more of cable gas broadband plus other services aims and everything. And that's a very promising product and which we are upselling to both our cable and boats and describers driving them that is increasing our stickiness and plus this is improving our revenues in that set.

Okay. And in a scenario of strong tower competition on si,what are the levels you would use to protect margins and market share in Cable TV and Broadband?

See, we have #1 Digital TV provider right now, as we see. And we are increasing our -- we are expanding in different states. And we have in penstates and 5 UTIs and only 2 states are left and I think 3 duties are left. And that's why we have gone for at in the sky technology where we have the signal at every nook and can in the country now. And we are looking forward that how we can expand into densely we can expand into every district of India going forward. It's more of like a bar and are not again the city or in the whole estate in the whole villages and everything which is covered. As you know, like India, around 350 million households have there around 10 million households are TV households. Still is a long, long way for India to go. Same in the broadband if we talk about 3 million households in India and only somewhere 50 million out of the broadband and that. So still a long, long way to go. And here, we have to create the infrastructure, which is really to expand your business and cut it to the need of the customers. So that's what we are doing, and we are hopeful that this strategy will work.

Okay. Okay. Sir, got it. And sir, how is the infrastructure operationalization panning out currently? If you could...

Yes. very good. Already around -- in the adenine have seen that around 2.5 million existing subscribers have been converted into [indiscernible] platform and around 200 new subscribers have come into the. We have saved around bandwidth saving somebody coming to the takeout to close over the first quarter. We are looking forward that increase with the bank. And so he is, I would say, successful. We have started the whole pick somewhere in the February and March start. And in the last 4 months, a little more than 2.5% more we say it's close to 27 million in some time state this platform. So yes, we are looking forward that in the coming quarters, more savings, more operational benefit and more penetration in the blue markets. New market swings, not in the state, I'm talking about the states. So that will help us see in the process in the whole [indiscernible].