Hathway Cable & Datacom Ltd Management Discussions

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.

A decade ago, Indias economy underwent a rollercoaster ride when the US Federal Reserve (Fed) first hinted at raising policy rates and oil prices breached the US$90/barrel threshold. The Current Account Deficit (CAD) in the fiscal year 2013 was 4.7% of GDP (and it reached 6.1% of GDP in one of the quarters), and the foreign exchange reserve stood at approximately US$292 billion. Inflation stood at 10%, and the fiscal deficit was around 4.5%. Spooked by weakening economic fundamentals, investors quickly started withdrawing funds from the capital markets and consequently, the rupee depreciated significantly against the US dollar in 2013, losing over 20% of its value.

Fast forward 10 years to now, US Fed policy rates stand at 4.5% and oil prices are hovering around US$85/barrel, but that is where the similarities end. Indias CAD has narrowed to 1.9% of GDP in fiscal 2023 (and is expected to go down further in the next fiscal), while foreign exchange reserves have nearly doubled to US$568 billion. Current inflation stands at 5%, and the fiscal deficit is targeted to be 5.9% of GDP in fiscal year 2024.

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.

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.

These forecasts are based on assumptions that fuel and nonfuel commodity prices will decline in 2024 and 2025 and that interest rates will decline in major economies. Annual average oil prices are projected to fall by about 2.3 percent in 2024, whereas nonfuel commodity prices are expected to fall by 0.9 percent. IMF staff projections are for policy rates to remain at current levels for the Federal Reserve, the European Central Bank, and the Bank of England until the second half of 2024, before gradually declining as inflation moves closer to targets. The Bank of Japan is projected to maintain an overall accommodative stance.

For advanced economies, growth is projected to decline slightly from 1.6 percent in 2023 to 1.5 percent in 2024 before rising to

1.8 percent in 2025. An upward revision of 0.1 percentage point for 2024 reflects stronger-than-expected US growth, partly offset by weaker-than-expected growth in the euro area.

The global economic recovery from the COVID-19 pandemic, Russias invasion of Ukraine, and the cost-of-living crisis is proving surprisingly resilient. Inflation is falling faster than expected from its 2022 peak, with a smaller-than-expected toll on employment and activity, reflecting favourable supply-side developments and tightening by central banks, which has kept inflation expectations anchored. At the same time, high-interest rates aimed at fighting inflation and a withdrawal of fiscal support amid high debt are expected to weigh on growth in 2024.

We are also cognizant of downside risks to global growth and that numerous countries representing 49% of the combined global population will head to the polls this year, which will add to political uncertainties.

The 10 years of foundation-building

Accumulation of know-how and capability sets are like letters in the board game while products are like words. In the game, possessing a higher number of letters not only increases the ability to make more words but also gives the player the edge needed to make longer and more complex words that most others with limited letters cannot make, thus gaining more "points."

In view of the above approach, the three capabilities (letters) that have driven Indias ability to create unique goods and services (longer or more complex words) are as follows :

• Infusing technology

Indias digital economy grew 2.4 times faster between 2014 and 2019, generating about 62.4 million jobs.

As its know-how and capabilities were enhanced, India started creating newer and more complex products and solutions for its large consumer market, which not just worked as a testing ground but also soon presented opportunities to scale up. Government policy and initiatives also fostered innovation by building the required infrastructure and ensuring security and responsiveness.

Solutions from technology-led know-how resulted in greater financial inclusion (through innovative modes of digital payments such as unified payments interface [UPI]), formalization of credit (with account aggregator networks), and plugging revenue leakages (using online tax platforms and FASTag), among others.

"Higher revenues from tax collections and plugging loopholes have contributed to meeting the fiscal deficit gap and adding more resources for the government to spend on capex."

• Branching into niche and complex manufacturing

The second catalyst of Indias growth has been the simultaneous focus on developing niche and complex manufacturing sectors and building the supporting physical infrastructure. Currently, manufacturing accounts for a mere 15% of GDP, with manufacturers mostly suffering from a lack of competitiveness, driven by high logistics costs, rising inflation, inadequate scale of production and operations, poor collaboration networks and ecosystems, lack of ability to connect know-how with investment, weak branding, and poor productivity. These factors have also limited the growth and contributions to the economy, of micro, small, and medium enterprises,which are critical to the success of the manufacturing ecosystem.

There has been an increasing realization that India needs this sector to expand to spur employment for low-skilled and semiskilled workers (and to absorb "disguised unemployed" workforces from the agricultural sector) and reduce dependence on critical goods and geographies. After the trade war between major nations and the COVID-19 pandemic, global supply chains have remained fluid and multinational corporations are looking for alternate geographies as investment destinations to diversify their supply chains. Amid stiff competition, India has a small window to move before supply chains freeze again.

• Underscoring competitiveness through exports

The third catalyst is a robust emphasis on exports. According to Adam Smiths theory, a nation can specialize depending on the market it serves.

Trade opens up new markets and, therefore, boosts the scope of specialization as it integrates a new nation with the rest of the global value chain. Focusing on exports will compel manufacturers to scale up and meet international regulatory requirements and quality standards, thereby improving competitiveness and productivity.

Over the last decade, India has diversified its export basket and moved toward higher value added products as policymakers realized that if India were to compete with the rest of the world, it had to produce high-quality, cost-competitive goods, while increasing product complexity.

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

INDIAN MEDIA & ENTERTAINMENT ("M&E") SECTOR OVERVIEW:

The Indian M&E sector continued its growth trajectory; it grew by INR 173 billion (8.1%) to reach INR 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 INR 2.55 trillion by 2024, then grow at a CAGR of 10% to reach INR 3.08 trillion by 2026.

INDIAN M&E SECTOR GREW 8% IN 2023 TO CROSS INR 2.3 TRILLION

Segment	2019	2022	2023	2024E	2026E	CAGR 2023 - 2026 E
Television	787	709	696	718	766	3.20%
Digital Media	308	571	654	751	955	13.50%
Print	296	250	260	271	288	3.40%
Online Gaming	65	181	220	269	388	20.70%
Filmed Entertainment	191	172	197	207	238	6.50%
Animation and VFX	95	107	114	132	185	17.50%
Live Events	83	73	88	107	143	17.60%
Out of Home Media	39	37	42	47	54	9.30%
Music	15	22	24	28	37	14.70%
Radio	31	21	22	23	27	6.60%
Total	1910	2144	2317	2553	3081	10.00%

All figures are gross of taxes (INR in billion) for calendar years : EY estimates

FUTURE OUTLOOK

The M&E sector will grow by INR 764 billion to reach INR 3.1 trillion in 2026

THE M&E SECTOR HAS GONE MEDIUM AGNOSTIC

The Indian M&E sector will grow at a CAGR of 10% and add INR 764 billion in three years. New media will provide 61% of this growth, followed by animation and VFX (9%) and television (9%). We expect all segments to grow, barring unforeseen situations, and so long as Indias GDP grows 5% or more.

Video remained the largest earning segment in 2023, as it is the simplest and most easy-to-understand medium of consumption.

It is estimated that by 2030, India will have almost a billion active screens of this, around 240 million will be large (TV, laptop,

PC) and the balance will be small (mobile phones, phablets). Given the 1:3 ratio between large and small screens, it will be imperative for media companies to have a multiscreen and multi-format strategy.

TELEVISION

The future of Television will be three differentsegments:

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 increaseAverage Revenue Per Users ("ARPUs") 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.

Subscribers	2020	2021	2022	2023	2026E
Pay TV (cable + DTH + HITS)	131	125	120	118	113
Free TV	40	43	45	45	50
Unidirectional TV	171	168	165	163	163
Connected TV (bi-directional)	5	10	15	19	40
Total TV	176	178	180	182	203

EY estimates : millions of subscriptions

Distribution Subscription

Overall TV connections will keep growing at a healthy pace to reach 203 million by 2026 as Indias per capita income continues to grow.

The market is clearly segmenting into pay TV, free TV and connected TV, each being sizable in itself

Distribution income reversed its falling trend in 2023 to grow 2%, despite pay TV homes reducing by 2 million to 118 million (including pirated and under-declared homes)

Pay TV ARPUs increased by approximately 4% to reach

INR 274 per month (gross of taxes)

An increase in piracy and under declaration was noticed as channel price increases could not be entirely passed on to consumers differential

Connected TV sets reached 35 million, of which around 19 million connected to the internet weekly Viewership and reach

Number of television channels increased to 899, of which 61% were free-to-air Future outlook

By 2026, television revenues are projected to reach INR 765 billion, with a Compound Annual Growth Rate (CAGR) of 3.2%, approximately half of the expected inflation rate

Total TV screens will increase from 182 million in 2023 to 202 million by 2026, with the mix changing significantly in favor of connected TVs

The situation post 2026 could be quite different, once wired broadband crosses 60 million to 70 million homes and 5G connections scale significantly. At this point, it is expected that connected TVs will start scaling more quickly, and reach 100 million by 2030, while linear TV homes drop to 140 million, of which 57 million would be free TV homes

Future outlook

It is expected that total TV subscriptions will grow and reach 210 to 240 million by 2030, on the back of Indian households growing at a CAGR of 1% and wired (or similar) broadband homes reaching 100 million on the back of falling ARPUs, which will remain at INR 700 per month in the medium term, or roughly two times the average pay-TV rates.

Subscriptions	Dec-21	Dec-22	Dec-23
Wired Broadband	26	32	38
Wireless Broadband	766	800	866
Total	792	832	904

Subscription income will achieve a CAGR of 2.9%, reaching 435 billion by 2026. This growth is driven by several conflicting factors;

Television households will grow due to the following reasons:

Increase in population will increase Indian households from 323 million in 2023 to 332 million till 2026 which will increase the demand for TV sets

165 million households will enter the Indian middle class by 2031

Low entry barrier to consume free television

Continued electrification of rural areas, particularly in the Hindi speaking markets like UP and Bihar

Efforts to reactivate deactivated Set Top Boxes ("STBs") which have been initiated by certain private players

Relative pricing of television to broadband remains currently much in favor of television

Availability of television sets for as low as 6,000 as well as a flourishing secondhand television market

Growth Required innovation and Incentives

Multi-Window i.e. packaging and pricing across the three TV consumer segments, needs to be implemented

Broadcasters will need to create smart bundles at price points for different regions and audiences, subject to regulatory permissions

Increase flexibility to choose/ replace channels within bundles in order to prevent churn

TV content distributed through OTT platforms could be placed behind a paywall, and not be provided free of cost online along with its TV broadcast, except for those who have subscribed to the channel on TV, or as delayed catch-up viewing

OTT and short video content can be used to create metro-centric television channels

Public-private partnership can enable TV dark homes to buy televisions through incentives such as:

- Free distribution of sets under government programs in border/ sensitive areas

- Subsidized distribution of sets and STBs

- Creating a low-cost India TV plus receiver product

- Increased adoption of HD hardware needs to be incentivized to enable premiumization

INDIAN BROADBAND INDUSTRY:

With over 900 million broadband subscriptions, India has the second largest broadband subscriber base in the world, after China.

Around 12% of Indian households had a wired broadband connection

According to data published by Ookla in December 2023, India ranked 22nd in the world for mobile speeds and 85^th for fixed broadband speeds, with a median mobile internet connection speed via cellular networks at 91.81 Mbps and a median fixed internet connection speed at 60.13 Mbps

96% of those accessing the internet used broadband, of which 4% used wired broadband and the rest used wireless services

Broadband usage increased by 9% in 2023

Indias low data prices are the key reason for the growing telecom internet user base, and consequently, the growth being witnessed across online entertainment, audio streaming, gaming, social media, etc.

Price increases can have several implications, such as

- subscriptions with low utilization being deactivated,

- slower growth in internet reach and

- increase in television reach and time spent

ONLINE CONSUMPTION INCREASED

Indias low data prices are the key reason for growing telecom internet user base, and consequently, the growth being witnessed across online entertainment, audio streaming, gaming, social media, etc.

At 4.8 hours per day, Indians came sixth in the world, for the most amount of time spent on phone apps in 2023, a 9% growth since 2020.

Indians spent an aggregate of 1.19 trillion hours on their mobile phones in 2023, up 10% from 1.08 trillion hours in 2022, which was the highest in the world Indians.

Average time spent on social media and Entertainment by the Indians is around 78%.

In India, average monthly mobile data usage per smartphone was 31GB per month in 2023, and this is set to increase at a CAGR of 16% to reach 75GB by 2029.

Growth was driven by increased adoption of 4G and 5G, which grew to 85% of total subscriptions as compared to 74% in 2022

There were 1,190 billion telecom subscriptions in December 2023 as compared to 1,170 billion in December 2022.

Urban subscriptions comprised 56% while rural subscriptions were 44%

Indias tele-density was 85%, but was heavily skewed to urban areas (133%) as compared to just 58% in rural areas

We estimate that the digital segment will grow to INR 955 billion by 2026, at a 13.5% CAGR, reflecting the changing consumption patterns being witnessed due to growth in connected televisions, mobile phones and broadband connectivity.

As the second largest segment in 2023, it continues to reduce the gap with television, and we expect it to become the largest segment in 2024.

COMPANY OVERVIEW

Hathway Cable and Datacom Limited (the Company), a subsidiary of Reliance MDA Group, is a vibrant Organisation engaged to provide fixed line services through ISP and CATV to millions of homes across the Pan India. As one of the leading fixed line internet service providers in the country, HCDL provides uninterrupted and rapid-speed connectivity through its fast-growing ISP business along with OTT offering, the first Indian Multi System Operators (MSO) to launch GPON FTTH and has 6.2 Mn Home passes and 1.1 Mn subscribers base and approximately 79,065 Kms of Fiber Optic Cable covered Pan India to service the customers.

Hathway Digital Limited (HDL), a wholly owned subsidiary of HCDL, provides CATV services, which is one of Indias largest Multi System Operators (MSOs), with 7 digital head ends and a network of approximately 35,000 Kms of Fiber Optic Cable providing cable services to 5.3 Mn viewers (including through its fellow subsidiaries & JVs) pan India and reach to 700+ towns and adjoining areas.

HCDL also delivers both CATV and Broadband services in certain parts of the country through its associate company, GTPL Hathway Limited.

Broadband Business :

Leveraging the cutting-edge FTTH technology, the Company has significantly enhanced the customer experience by integrating advanced digitization and automation processes. This strategic focus has successfully expanded our FTTH consumer base.

As of March 31, 2024, our 1.1 million wireline broadband subscribers are a testament to the growing preference for wireline broadband, which facilitates not only online media consumption but also provides seamless data accessibility across multiple devices at home.

Our customers enjoy the freedom of unlimited data, which has empowered them to seamlessly manage diverse digital activities from streaming OTT content and conducting office video calls to fulfilling online educational requirements. As of March 2024, the average monthly data usage per FTTH customer has surpassed 346 GB, indicating robust engagement with our network, particularly in the Southern market.

The Companys dedication to providing uninterrupted service is unwavering. In line with this commitment, we have adopted dual-band routers with advanced band steering technology as the standard for all new high-speed broadband connections. This technological enhancement guarantees superior WiFi performance, ensuring that a diverse array of devices within our customers homes benefit from a consistently reliable and seamless online experience.

Reflecting the Companys unwavering commitment to service excellence, there has been a notable 16% increase in the average monthly data usage per customer in March 2024, compared to the same period last year. This uptick not only underscores the consistent reliability of our services but also highlights the growing digital engagement of our customers within our robust network.

The Company has taken a significant leap forward in delivering exceptional customer service by harnessing the power of AI-driven automation. This innovative approach has led to the swift resolution of over 78% of non-network technical queries in under two minutes. We have restructured our entire support system to ensure that customers receive assistance within four hours, and new customers enjoy same-day installation services. Our commitment to customer empowerment is evident in our ongoing journey to re-engineer the customer interface, making it technology driven. This transformation is aimed at enhancing operational efficiency and maintaining a strong focus on continuous innovation. The key innovation initiatives undertaken this year are outlined below:

Live Chat Every customer whose non-network query could not be addressed by the ChatBOT is being offered an option to do Live Chat, to resolve 90% of such queries within one hour.

Live Call Transfer Any customer whose non-network concern could not be resolved by the VoiceBOT is being automatically transferred to a team of experts to provide on call resolution.

Seamless WiFi experience on high speed plans is being made possible by the use of Dual band WiFi devices with band steering feature.

Our renewed version of Sales App has made possible the same day activation for more than 50% of our new broadband customers.

During the year under review, the Broadband business revenue stood at 622.67 crores and the subscribers stood at

1.1 Mn (Previous Years Broadband business revenue stood at

638.72 crores and subscribers stood at 1.12 Mn).

Cable Television Business:

Hathways CATV services, delivered through its subsidiary Hathway Digital Limited (HDL, The Company), one of the largest multi-system operators (MSO) in India; offers a comprehensive product portfolio of standard definition and high-definition cable TV & owned channel services with a wide range of channels and programming options. Customers can access a diverse selection of television content, including live broadcasts, movies, sports, and other entertainment genres, providing them with a satisfying viewing experience.

The Companys vision is to be a single point access provider, bringing into the home and work place a converged world of information, entertainment and services.

The Company has entrenched Presence in all major Metros and mini metros, where the cable penetration takes the Company to one of the Top Two positions in the city with 7 main head ends and a network of approximately 35,000 Kms of Fiber Optic Cable, providing Digital Video Broadcasting over Cable (DVBC) services to 5.3 Mn viewers (including through its fellow subsidiaries & JVs) pan India and reach to 700+ towns and adjoining areas. Post implementation of the New Tariff Order (NTO), customers have the freedom to watch channels of their choice with best-in-class technology.

Apart from distribution of satellite channels, the Company offers viewers and subscribers a unique bouquet of entertainment and infotainment channels, which include H-Tube, CCC Cine Channel, Hathway Music, Hathway Shoppe, Hathway Life in association with National Geographic, Hathway entertainment and Hathway movies.

The Company also expanded its footprint to 271 new towns in the current year, predominantly in the states of West Bengal, Karnataka, Andhra Pradesh, Odisha & Tripura, during FY23.

To enhance the systems capabilities using the technical feasibility and to delight customers, numerous initiatives were undertaken during the year, including : 1. Offering innovative packages as per regions served 2. Enhanced content offering 99+ HD channels 3. Pre-paid services for subscribers 4. Unique electronic program guide (EPG)

5. Product/GTM strategy including new products and schemes to make Hathway infrastructure-ready to seize the benefit of the more conducive prevailing market.

6. The Company was one of the few MSOs which managed to hold ground and reinforce market share in a situation where most of other MSOs are losing their base and share to OTT.

7. New Initiatives, including:

Enabling QR Code on EPG based digital payments with credit going to LCOs Bank Account directly and providing instant activation

API creation for enabling instant activation through any

App used by the LCOs

Next generation HEVC HD box and OTT hybrid box were launched during the year to give Cable Television Customers enhanced viewing experience

Investment in IT and other infrastructure to create a robust structure for highest quality content delivery across all areas of operation (Headend upgrades, Security Infrastructure, LCO Portal Features

Introduction of Trade partner Helpdesk for Local Cable

Operators to support their day-to-day function on the ground and monitor their complaints

8. Online renewal facility to empower customers by giving them the freedom to renew their packages at the click of a button through MyJio App, at their own convenient time and place.

9. Leveraging platforms like WhatsApp for continuous customer engagement.

10. TV Plug piloted - A new connectivity technology through which, the Company can provide most reliable last mile Cable TV connectivity from a Mobile Tower Network.

FINANCIALS REVIEW:

Standalone Operating Gross Revenue stood at INR 622.7 Cr. compared to Previous year INR 638.7 Cr. Total Comprehensive Income stands at INR 86.7 Cr (P.Y. INR 61.4 Cr).

Consolidated Gross Revenue stand at INR 1,981.0 Cr compared to Previous year INR 1,858.4 Cr and Total Comprehensive profit stand at INR 101.5 Cr. (P.Y. INR 58.1 Cr).

INR Crs.

Standalone	FY24	FY23	Growth%
Operating Revenue	622.7	638.7	-3%
Operating EBITDA	200.4	194.8	3%
EBITDA Margin %	32%	31%	2%
Total other comprehensive income for the Year	86.7	61.4	41%

 

Consolidated	FY24	FY23	Growth%
Operating Revenue	1,981.00	1,858.40	7%
Operating EBITDA	322.5	315.4	2%
EBITDA Margin %	16%	17%	-1%
Total other comprehensive income for the Year	101.5	58.1	75%

RATIO ANALYSIS

S. No.	Particulars	Year Ended March 31, 2024	Year Ended March 31,2023	Variance	Remarks
1	Current Ratio	3.46	3.00	15%	Movement of Investment from Non Current to Current
2	Debt-Equity Ratio	0.00	0.00	N.A.
3	Debt Service Coverage Ratio	N.A.	N.A.	N.A.
4	Inventory Turnover Ratio	N.A.	N.A.	N.A.
5	Trade Receivables Turnover Ratio	12.16	18.82	-35%	Reduction due to Increase in Average Trade Receivable
6	Operating Profit Margin	16%	17%	-1%
7	Net Profit Ratio	5%	4%	1%
8	Return on Capital Employed (Excluding Working Capital Financing)	(0.01)	(0.01)	N.A.

The Company has 325 & 241 employees on roll in the Company & HDL respectively as at 31^st March 2024.

DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

The Companys internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies. The Company has a well-defined delegation of power with authority limits for approving revenue as well as expenditure. The Company uses a state-of-the-art enterprise resource planning (ERP) system to record data for accounting and management information purposes and connects to different locations for efficient exchange of information. Entity Level Control framework document has been documented. The documentation of process maps and key controls has been completed during previous financial year for all material operating processes. The Company has continued its efforts to align all its processes and controls with global best practices.

Detailed reviews are conducted on a perodic basis to evaluate the design, adequacy and operating efficiency of the Internal Financial Controls of the Company. Management testing has been conducted on a sample basis for Revenue, Expenses & payables, Fixed Assets, Inventory, Compliance, Related Party, Borrowings, Consolidation, Contingent Liability, Loans and Advances, Cash management, Current investment, Forex exposure and hedging, Finalisation, Retirement benefits and remedial actions have been taken or agreed upon with a finite closure date where control improvement areas were identified.

Based on the above, the Management believes that adequate Internal Financial Controls exist in relation to its Financial Statements.

SWOT ANALYSIS

Strengths	Challenges
Broadband:	Broadband:
First MSO to Launch GPON with assured speed of 300 Mbps and above on Wi-FI.	Retention of Lower GB usage customers as they can manage their usage from mobility at lower price
Highly engaged customer base with Average data consumption ~ 340 Gb per subscriber per month	Aggresive pricing plan from competition impeding ARPU Growth
AI tools exhibiting higher traction and elasticity in customer interface through increased in Chat BOT and Voice BOT interaction
SLA driven service for retail customers enhancing customer delight

 

Cable:	Cable:
5.6 Million digital subscribers base; Offers its cable television services across 700 +towns, operating in pan India regions	Continuing movement of the pay TV base to OTT platforms at the upper end and free TV (at the lower end)
Enhanced system and technical capabilities based on JIO fibre backend support to meet customer expectations for best in class TV viewing experience	Revenue sharing with LCOs making it difficult to compete with DTH
Encouraging LCOs to empower their customers with online renewal facility.	Lower paying capacity of consumers particularly in Phase 3 and 4 markets Servicing hindrances in interior markets
Provision of Mobile Apps and Portals to our customers and LCOs
Invovative GTM strategy to address evolving market needs, catering to various demographies

 

Opportunities	Threats
Broadband:	Broadband:
Increasing trend in demand for high speed fixed broadband	Migration of Low end users to mobility platforms due to competitive pricing
Use cases of Online education & infotainment application will help in continuous increase in demand for fixed line broadband	New wireless technology for providing broadband to retail customers can be a threat to fixed line broadband industry
Increase in Content through OTT platform is one of the prime drivers for online consumption.

 

Cable:
Penetration in untapped market Rationalise ARPU through innovative DPO packs	Free Dish offering stiff competition in Phase 3 and 4 Hindi Speaking Markets
Increase customer engagement through better regional content	High end consumers / Nuclear families / Bachelors can move to TV viewing through OTT apps

RISKS AND CONCERNS

Product / Technology Risk	Competition
Consequence: The traditional cable customer preferences are very slowly changing and in long term some of them may move towards getting content in a non-linear manner. Inability to meet the customers demand might lead to loss in business. Also Rapid advancements in technology leading to obsolescence of existing assets.	Consequence: Broadband and Cable business verticals where Hathway is present, has low entry barriers and multiple players across geographies.
	Risk Mitigation Strategy: To take early lead over competition,
	Hathway has offered cutting edge products & solutions at value for money pricing to enhance customers delight Hathway is well poised to grow in this new segment of the market.
Risk Mitigation Strategy: The company is well placed to serve the arising needs of the customers by offering OTT & broadband services to existing cable customers.
The shift to MPEG-4/HEVC STBs in cable and provision of providing broadband through DOCSIS 3.1 /GPON network is testament to the fact that the Company is sensitive towards the rapidly evolving technology trends.
Awareness Risk
Consequence: LCOs function as primary facilitators of our business expansion. Therefore, delay in updating/on boarding them on latest initiatives undertaken by the company would negate the first mover advantage.
Risk Mitigation Strategy: The company has launched Hathway Connect portal for LCOs by imparting real-time training to help them manage their customers.