Hathway Bhawani Cabletel & Datacom Ltd Management Discussions

Global Economy Overview:

Global growth, estimated at 3.1 percent in 2023, is projected to remain at 3.1 percent in 2024 before rising modestly to 3.2 percent in 2025. Compared with that in the October 2023 World Economic Outlook ("WEO"), the forecast for 2024 is about 0.2 percentage points higher, reflecting upgrades for China, the United States, and large emerging market and developing economies. Nevertheless, the projection for global growth in 2024 and 2025 is below the historical (2000 – 19) annual average of 3.8 percent, reflecting restrictive monetary policies and withdrawal of fiscal support, as well as low underlying productivity growth. Advanced economies are expected to see growth decline slightly in 2024 before rising in 2025, with a recovery in the euro area from low growth in 2023 and a moderation of growth in the United States. Emerging market and developing economies are expected to experience stable growth through 2024 and 2025, with regional differences.

World trade growth is projected at 3.3 percent in 2024 and 3.6 percent in 2025, below its historical average growth rate of 4.9 percent. Rising trade distortions and geoeconomic fragmentation are expected to continue to weigh on the level of global trade. https://www.imf.org/en/Publications/WEO/Issues/2024/01/30/world-economic-outlook-update-january-2024

Indian Economy Overview:

India turned its story around in one decade-one that saw populism breakthrough in the West in 2016, demonetization in 2017, the shadow banking crisis of 2018, a once-in-a-lifetime pandemic in 2020, the persistently high inflation in the West and two wars since early 2022. Despite uncertainties, India managed to sail ahead while building its ship. Extrapolating from Professor Ricardo Hausmanns "Scrabble" theory of economic development.

India took determined and focused actions to convert know-how and capabilities into unique products and solutions. Indias emphasis on using technology to accumulate and diffuse tacit knowledge, building high-end manufacturing capacity, and improving competitiveness through exports formed the three necessary catalysts that boosted its growth trajectory and improved its economic fundamentals over the years.

Indias near-term growth outlook seems optimistic as it reaps the benefits of the steps it has taken so far. India now seems to be poised for a steady growth, after the big bang GDP numbers witnessed in the second quarter of fiscal 2024, i.e. between 6.9% and 7.2% or even higher, given the robustness observed in the industry sector. We believe momentum will be strong as the world recovers later in 2024, and as that global recovery tide lifts all boats, India will see much broader economic growth.

Source : https://www2.deloitte.com/xe/en/insights/economy/asia-pacific/india-economic-outlook.html

Indian Media & Entertainment Sector Overview:

The Indian Media & Entertainment ("M&E") sector continued its growth trajectory; it grew by 173 billion (8.1%) to reach

2.32 trillion.

While the sector was 21% above its pre-pandemic levels, television, print and radio still lagged their 2019 levels While television remained the largest segment, we expect digital media to overtake it in 2024.

We expect the M&E sector to grow 10.2% to reach 2.55 trillion by 2024, then grow at a CAGR of 10% to reach 3.08 trillion by 2026.

Television

The future of Television will be three different segments:

By 2030, the large screen opportunity will evolve into three significant segments across pay, free and smart TV, none of which can be ignored by broadcasters and studios.

Pay TV will continue to gain audiences, but will also start switching to smart TVs as wired (or similar) broadband grows from 19 million homes today to 40 million homes by 2026 and over a 100 million by 2030.

Both the telcos and the Local Cable Operators ("LCOs") will play an important role as they aim to increase average revenue per user, through bundling broadband with linear TV services, as well as by bundling content to drive adoption of Cable Television ("CATV").

Free TV will remain a "temporary" medium viz., it will gain audiences as more families come out of poverty and into the lower middle class, and it will lose audiences as the middle-class families move up.

The key challenge posed by connected smart TVs is that broadcasters will now compete against social media and digital native platforms as well for share of time on the large screen.

Bundling will become critical for smart TV growth

Just as Distribution Platform Operators ("DPO") aggregated content from broadcasters for linear television, telcos and Internet Service Providers ("ISP") will need to offer bundles at various price points to attract and retain consumers.

We estimate that if pricing is made comparable to television pricing (or at a slight premium when bundled with data) for popular streaming services, the reach of smart TVs could cross 100 million households sooner.

The unified interface will become a critical aspect of future growth of connected TVs, both from a simple customer experience point of view, as well as a place for discovery of content. It will become the new landing page and earn placement and marketing revenues.

New content windows will emerge

Monetization will be at the mercy of consumers willingness to pay, and unlike international markets, Indian markets are more heterogeneous and need to be finely segmented.

Accordingly, premium Subscription Video On Demand ("SVOD"), theatrical, SVOD, bundled SVOD, satellite, Transactional video on demand ("TVOD") and finally free television windows could come into existence for different types of content.

Linear pay TV is here to stay

Linear TV will grow when TV dark homes come onboard and when free TV audiences upgrade to pay.

Given India has around 323 million households today, growing to 345 million by 2030, of which say 25% will be under the poverty line, there is still an opportunity of around 70 million homes.

In order to address the opportunity and reduce television dark households, a number of initiatives will need to be evaluated, such as: a) Creation of lower priced FTA packs b) Differential pricing and bundling for rural markets c) in agreement with the regulator d) Reactivation of the millions of inactive set-top boxes through incentive schemes e) Creating relevant content baskets for underpenetrated markets

The television segment has witnessed some interesting, yet dichotomous developments in recent times. Although the number of pay TV subscribers continue to decline, the overall number of TV viewers continues to grow. While advertising shrunk, the number of TV screens are growing and the overall segment is expected to have a positive outlook in the coming times. Viewership of connected TVs would continue to grow and proliferate with the increase in broadband and 5G.

OPPORTUNITIES, THREATS AND BUSINESS OUTLOOK

High end consumers / Nuclear families / Bachelors can move to TV viewing through Over-The-Top ("OTT") apps.

DPOs get the benefit of creating tailor made packs as per the overall consumers demand per market requirement.

The Company is taking various steps to improve performance by: a) Improving efficiency though combination of strategies such as channel packages, promoting HD and persuading consumers to move towards DPO packs comprised with most viewed channel / content at a reasonably affordable price b) Optimization of overheads by exercising effective control and regular review mechanism c) Increase customer engagement through better regional content

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has proper and adequate internal control system under which management reports on key performance indicators and variance analysis are made. Regular Management committee meetings are held where these reports and variance analysis are discussed and action plan initiated with proper follow up. Operational Reports are tabled at Board Meetings after being discussed in Audit Committee meetings.

BUSINESS PERFORMANCE

The Company is providing Cable Television Network Services which is considered as the only reportable segment. The companys operations are based in the state of Maharashtra, India.

HUMAN RESOURCES

An Orientation has been given to the personnel policy with emphasis on performance. Employee strength was managed at various levels with reallocation of responsibilities for better utilization of resources.

Measures are continuing to facilitate higher levels of output and productivity. Managerial Effectiveness is being improved by appropriate development and training programs, better co-ordination and improvement in communications.

As of March 31, 2024, there were 10 permanent employees on the rolls of the company.

COMPANYS FINANCIAL PERFORMANCE AND ANALYSIS

( In Lakh)

Particulars	Year ended
	March 31, 2024	March 31, 2023	March 31, 2024	March 31, 2023
	Standalone		Consolidated
INCOME
Revenue from Operations	268.33	305.5	268.33	305.5
Other Income	3.68	6.82	3.68	6.82
TOTAL INCOME	272.01	312.32	272.01	312.32
EXPENSES
Feed Charges	89.18	83.13	89.18	83.13
Other Operational Expenses	22.77	23.36	22.77	23.36
Employee Benefit Expenses	51.25	62.57	51.25	62.57
Finance cost	-	-	-	-
Depreciation, Amortization and Impairment	16.77	16.44	16.77	16.44
Other Expenses	87.90	93.17	87.90	93.17
TOTAL	267.87	278.67	267.87	278.67
Profit / (Loss) before exceptional Items and tax	4.14	33.65	4.14	33.65
Share of net Profit / (Loss) of Joint venture accounted for using the equity method	-	-	(8.13)	(8.05)
Profit / (Loss) Before Taxation	4.14	33.65	(3.99)	25.6
Tax Expense
Current tax	-	-	-	-
Deferred tax	0.30	8.63	0.30	8.63
Profit / (Loss) After Taxation	3.84	25.02	(4.29)	16.97
Other Comprehensive Income	0.84	0.6	0.52	0.6
Total Comprehensive Income for the year	4.68	25.62	(3.77)	17.57

Ratio Analysis (Consolidated Basis) :

Sr. No. Particulars	Year Ended March 31, 2024	Year Ended March 31, 2023	% Variance	Reason for Variance
1 Current Ratio	0.49	0.23	119%	Due to reduction in trade payables and increase in Current Assets
2 Debt-Equity Ratio	NA	NA	NA
3 Debt Service Coverage Ratio	NA	NA	NA
4 Return on Equity Ratio	(0.02)	0.10	-124%	Due to reduction in revenue from operations and Net Profit.
5 Inventory Turnover Ratio	NA	NA	NA
6 Trade Receivables Turnover Ratio	42.65	31.45	36%	Due to reduction in Turnover & trade receivables
7 Trade Payables Turnover Ratio	6.61	3.67	80%	Due to reduction in Turnover & trade
				payables
8 Net Capital Turnover Ratio	(8.20)	(5.57)	47%	Due to Reduction in Revenue from operations
9 Net Profit Ratio	(0.02)	0.06	-129%	Due to Decline in Revenue from operations and increased cost
10 Return on Capital Employed	0.00	0.16	-98%	Due to reduction in Net profit
(Excluding Working Capital
Financing)
11 Return on Investment	0.04	0.04	0%

Operational Review:

The financial statements of your company have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the year ended March 31, 2024, the Companys total comprehensive Income for the period is 4.68 Lakh and Net worth is Positive by 202.50 lakh.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectation may be "forward-looking" within the meaning of applicable laws and regulations. Actual results might differ materially from those expressed or implied.