Revenue +12% but profitability collapsed 81% YoY; HITS bet costly near-term

Delivered ₹1015.4 Cr; confirmed 12.4% YoY growth

Delivered PAT ₹1.4 Cr (39% below call statement); NPM 0.1%, OPM 10.3%

No independent verification; specific metric reflects credible detail

No contradicting data; supported by 436 GB/user data consumption growth of 6% YoY

Deal not yet closed (Sept 15, 2026); management declined to quantify benefits

Right-of-use asset capitalization for HITS infrastructure added ₹6 Cr depreciation/finance cost, explaining PAT collapse. Benefit deferral to Q3/Q4 creates earnings valley.

Prior guidance said Q2 contribution; deal now closing mid-Sept (vs anticipated Q2), so contribution shifts to Q2 onwards (not Q1). No revenue impact this quarter.

Only 10k YoY subscriber adds (1.06M base); management acknowledged slowdown, appointed new CEO to reignite growth. Prior call implied stronger traction.

Operating margin expected 22% → 25% recovery remains on track; management reaffirmed full HITS benefits by Q3/Q4. No change to guidance, but near-term pressure acknowledged.

Kerala (6.5-7M addressable TV households, 75k base) and J&K (4.5-5M addressable, new entry) entered in Q1; prior call mentioned expansion but not specific markets or addressable size.

6 lakh subscriber base integration by 15 Sept; full effect Q2/Q3; will provide subscriber count uplift and EBITDA accretion. Benefits via market leadership and operating leverage in AP/Telangana.

₹6 Cr increase in depreciation and finance cost due to HITS right-of-use capitalization per accounting standards. EBITDA only down ₹3 Cr; PAT hit by finance charges. Margin will recover to 25% when HITS benefits flow.

Currently 16-17% extraction rate; target 20-21%. New CEO hired for aggressive expansion. Will invest in incremental home pass and market-wide penetration in Gujarat and new states.

Right now, we don't want to give it. Let integration complete first. Figures will come in next call and results.

2.5M+ existing subscribers converted to HITS platform, 200k new subs added. Bandwidth savings ₹4 Cr already in Q1. Full benefits by end Q3/start Q4 (40-50% this year, 100% next year). More operational benefits and new-market penetration ongoing.

Kerala: 6.5-7M TV households, already 75-80k base, continuing to grab more. J&K: 4.5-5M addressable, aiming to be major player. 6-12 month gestation for market profitability.

Will remain around ₹470 for now. Mix shift to higher-speed packages and subscriber migration to premium tiers driving growth.

Managing via partner negotiation with broadcasters. Absorbing some cost in P&L, raising subscriber prices where feasible. Partnership approach ensures no one loses: broadcasters, LCOs, subscribers. Leveraging scale as largest MSO.

Management confirmed 12% momentum sustainable; ACT deal to add ₹200-300M+ annualized revenue from Q2 onwards (unquantified). New markets contribute incrementally post 6-12 month gestation.

Contingent on HITS benefits materializing in Q3/Q4. Currently suppressed by ₹6 Cr depreciation/finance charge from HITS capitalization. Management confident in timeline but Q1 miss raises execution risk.

Targeting FTTX network buildout (75% ready, 5.95M footprint) and HITS infrastructure completion. Capex/revenue ~39%, heavy investment phase.

PAT collapsed ₹8 Cr (-81.2%) YoY despite ₹120 Cr revenue growth. NPM 0.1%, an alarming level. ₹6 Cr depreciation/finance charge from HITS right-of-use capitalization blamed, but cost base clearly swollen.

ACT deal closes 15 Sept 2026 (post Q2 quarter-end), limiting contribution visibility until Q3. Synergy figures (revenue, EBITDA) withheld from call. 6 lakh subscriber integration and cost savings unproven.

Only 10k broadband YoY subscriber adds (1.06M base); extraction rate 16-17% vs 20%+ target. Digital TV ARPU declining in new markets due to churn and discounting. Organic revenue growth capped unless new markets ramp faster.

Kerala and J&K have fragmented competition (DTH, local cable, Jio Fiber, Airtel/AirFiber). Market profitability uncertain. Management acknowledged 6-12 month gestation with margin discounting.

Broadcasters raising content acquisition costs annually. Management managing via negotiation and selective price increases, but margin squeeze possible if cost inflation outpaces ARPU growth.