Shares of GTPL Hathway took a hit, dropping nearly 9% to ₹133.50 in early trading on January 10. This sharp decline came after the company reported underwhelming earnings for the third quarter that ended on December 31, 2024. The weak performance left investors questioning the company’s growth prospects and their decision to invest in stocks.
Profit slump shakes confidence
GTPL Hathway’s net profit nosedived by 57.2% year-on-year, falling to ₹10.1 crore from ₹23.6 crore in the same period last year. The steep drop in profitability overshadowed a modest 4.3% growth in revenue, which rose to ₹887.2 crore compared to ₹850.8 crore a year earlier.
Operating performance also showed signs of strain, with EBITDA—a key measure of profitability—falling 12.6% to ₹105.3 crore from ₹120.5 crore. The EBITDA margin shrank to 11.9%, compared to 14.2% in the previous year, reflecting higher costs and operational challenges.
Broadband and cable TV: A mixed bag
In its broadband segment, GTPL Hathway added 37,000 subscribers over the past year, bringing the total count to 1.04 million. The company’s network reach expanded to 5.95 million homes, with 75% ready for fibre to the ‘x’ (FTTX) upgrades. Average revenue per user (ARPU) in the broadband segment edged up by ₹5 to ₹465 per month, while average data usage per user increased by 6% to 365 GB per month.
On the cable TV front, the company saw a yearly increase of 200,000 active subscribers, pushing the total to 9.6 million. Paying subscribers also grew by 200,000, reaching 8.9 million, contributing to subscription revenue of ₹3,024 million during the quarter.
Stock under pressure
The weak financial results rattled investors, sending the stock tumbling. By mid-morning, GTPL Hathway shares were trading at ₹133.7 on the NSE, down 8.7% from the previous day’s close. This came just a day after the stock surged 17% on January 9, driven by anticipation of the earnings report. Over the last three months, the stock has shed about 12% of its value, reflecting ongoing concerns.
What it means for investors
While the company has seen growth in its subscriber base and network expansion, the drop in profitability and fluctuating stock performance highlight potential risks.
If you’re considering whether to invest in stocks like GTPL Hathway, it’s essential to weigh the short-term challenges against the long-term potential. The company’s focus on enhancing its broadband and digital services could pay off in the future, but current financial struggles suggest a cautious approach might be wise. As of 12:58 PM on January 10, 2025, GTPL Hathway shares declined by 8.54% on the NSE, trading at ₹133.98 per share.
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