MOSL: SITI NETWORK (Neutral)- Phase 3/4 monetization to boost revenue
​SITI Network:Phase 3/4 monetization to boost revenue
(SITINET IN, Mkt Cap USD0.3b, CMP INR25, TP INR27, 5% Upside, Neutral)
- EBITDA miss led by subdued revenue: Revenue declined 3% QoQ to INR3,523m (in-line) due to a steep 48% QoQ fall in activation revenue. EBITDA fell 33% QoQ to INR672m (13% miss) on the back of a subdued top line and a 12% rise in other expense. Margin shrunk 860bp QoQ to 19%. Net loss widened to INR657m (-INR290m in 1QFY18; est. of -INR229m). Adjusted for one-off expenses (due to restructuring cost), net loss stood at INR608m, led by weak EBITDA and a 9%/12% QoQ rise in depreciation/finance cost.
- Phase 3/4 APRU boosts subscription revenue: Subscription revenue jumped 21% QoQ (+52% YoY) to INR2,050m (11% beat), led by ~10%/43% rise in ARPU to INR55/40 in DAS 3/4 markets. However, activation, carriage and broadband revenues pulled down overall revenues. Activation revenue decline was led by ~44% QoQ plunge in digital subscriber net adds (to 0.7m in 2QFY18). Carriage and placement revenue fell 7% QoQ due to a delay in negotiations. Broadband revenue of INR255m declined marginally by 1% QoQ (+2% YoY) due to competitive pressure impacting broadband subscribers (net adds declined by 2k).
- Phase 3/4 monetization to steer growth: Management indicated that ARPU should improve on the back of a) monetization of Phase 3 and 4 digitization; increase in Phase 1 and 2 ARPU led by HD and premium content. This, coupled with reducing churn and increasing collection efficiency, is expected to boost revenue. Implementation of TRAI order provides latent upside. We expect revenues/EBITDA CAGR of 19%/43% over FY17-20E.
Siti Networks Limited, formerly Siti Cable Network Limited, is a holding company. The Company is a multi-system operator (MSO), which is engaged in providing cable television network services, Internet services and allied services. The Company is engaged in the business of distribution of signals of television channels of various broadcasters. Its product range includes digital and analog cable television, broadband and local television channels. The Company operates through cable distribution in India. The Company has a portfolio of assets in media, packaging, entertainment, technology-enabled services, infrastructure development and education. The Company provides services in analog and digital mode, armed with technical solution to provide features, such as Video on Demand and Electronic Programming Guide (EPG). The Company markets its products under SITI brand name. The Company provides its cable services in approximately 350 cities in India and the adjoining areas.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.