GTPL Hathway Ltd - IPO Note - Angel Broking

Views of Mr. Abhishek Lodhiya (Sr. Equity Research Analyst - Infrastructure, Capital goods and Real Estate, Angel Broking):

GTPL Hathway Ltd. (GTPL) was initially incorporated by Aniruddhasinhji Jadeja and Kanaksinh Rana, through the consolidation of cable service businesses in Ahmedabad and Vadodara. In October 2007, Hathway acquired a 50% share of business. GTPL is a leading regional Multi System Operator (MSO) in India, offering cable television and roadband services with a market share of 67% of cable television subscribers in Gujarat and number 2 MSO in Kolkata and Howrah in West Bengal with a market share of 24% of cable television subscribers. As of January 31, 2017, the company's digital cable television services reached 189 towns across India, including towns in Gujarat, West Bengal, Maharashtra, Bihar, Assam, Jharkhand, Madhya Pradesh, Telangana, Rajasthan and Andhra Pradesh.

Outlook and Valuation: In terms of valuation, GTPL's P/BV multiple annualised 9MFY2017 at 3.1x, as compared to peers i.e. Den Networks 1.8x, Hathway Cable & Datacom 0.7x, Ortel Comm. 1.4x, Siti Networks 4.8x. The cable industry is already undergoing a period of weak performance and with disruptive pricing of new entrants, there is a high probability that the performance may weaken further. Hence, we recommend a NEUTRAL rating on the issue.

Source : Equity Bulls

Keywords