Ind-Ra downgrades Catvision due to sharp fall in rev in H1 FY19

MUMBAI: India Ratings and Research (Ind-Ra) has downgraded Catvision Limited’s Long-Term Issuer Rating to ‘IND BB-’ from ‘IND BB+’ due to share fall in revenue in H1 FY19. The Outlook is Negative.

The term deposit is valid up to the date of the next annual general meeting or within six months from the close of the next financial year, whichever earlier. Ind-Ra is unable to provide an update on the maturity date as the information is yet to be received from CL.

The downgrade reflects a sharp fall in the revenue of CL in 1HFY19 and operating losses incurred by the company in 2QFY19 owing to intense competition from Chinese companies (which are setting up manufacturing units for set-top boxes in India) and a shipment delay from the counterparty.

In 1HFY19 CL’s revenue was Rs 20.473 crore (1HFY18: Rs 43.50 crore) and EBITDA margin was negative 0.80% (8.40%). Its scale of operations continues to be modest.

The ratings, however, continue to be supported by CL’s promoters’ three-decade-long experience in the community antenna television equipment manufacturing business.

Incorporated on 28 June 1985, Catvision manufactures community antenna television equipment that provides cable television services. In addition, it manufactures cable TV products such as modulators, combiners, optic transmitters, optic nodes, radio frequency amplifiers, power supplies and splitters, and tap-offs of different functionalities.

As reported earlier, Catvision is expecting the demand for set top boxes (STBs) and headends from local cable operators (LCOs) to increase due to the implementation of Telecom Regulatory Authority of India’s (TRAI) tariff order.

The company feels that the implementation of the tariff order will pave the way for a large number of LCOs to set up their own networks. This, it said, will open huge business opportunities for the company as there will be increased demand for headend and STBs.

Catvision is also planning to launch a slew of products this year that are competitive and also incorporate some streaming features like casting and search. Stand-alone streaming products are also under development.

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