MSO Fastway sees improvement in profitability in FY17

MUMBAI: Multi system operator (MSO) Fastway Transmission has seen a 70% expansion of net profit in FY17 to Rs 75.48 crore compared to Rs 44.41 crore in the previous fiscal. PAT margin saw an improvement at 13.56% as against 8.46% in FY16.

Revenue grew by 6.18% to Rs 556.8 crore compared to Rs 524.39 crore in the year-ago period.

Fastway was set up as a joint venture between Gurdeep Singh and Digicable Network India in 2007. The company, which has a dominant market share in Punjab, has also expanded operations to Haryana, Himachal Pradesh, Rajasthan, Uttar Pradesh and Jammu & Kashmir.

The MSO has seeded over 3.8 million set top boxes (STBs) and has a more than 10,000 local cable operators (LCOs) under its network.

Fastway also offers value-added services to its subscribers such as live telecast from various religious places in Punjab, free music and radio channels, movies on demand, and kid’s channels.

It has laid intercity underground fibre optic cables covering around 7000 Kms in Punjab, for carrying cable TV signals. This allows the company to lease out unused fibre to telcos, infrastructure providers, internet service providers, and competitors.

According to a report by an agency, Fastway has a healthy net worth and total outside liabilities to tangible net worth ratio of Rs 246.8 crore and 1.8 times, respectively, as on 31 March 2017. The financial risk profile is expected to remain healthy over the medium term owing to steady accretion to reserves.

However, Fastway also has a significant exposure to group companies, with investments of Rs 75.42 crore (around 30% of net worth) as on 31 March 2017.

Since the MSO sizeable CapEx plans lined up over the medium term the exposure to group companies has become a critical issue. The report further stated that liquidity may remain under pressure, and any further increase in investments will remain a rating sensitivity factor.

The government’s cable TV digitisation initiative is expected to boost subscription revenue of MSOs and strengthen their business risk profiles.

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