RESULT UPDATE

HATHWAY CABLE & DATA COM Activation boom spurs growth

India Equity Research| Media

EDELWEISS 4D RATINGS Hathway Cable & Datacom’s ( Hathway) Q4FY13 numbers were well Absolute Rating BUY ahead of our estimate due to strong surge in activation revenue (INR876mn). Other key positives were: (1) robust subscriber addition at Rating Relative to Sector Outperformer 1.5mn (seeded ~0.73mn in Q3FY13); (2) huge 2,106bps YoY EBITDA Risk Rating Relative to Sector Medium Sector Relative to Market Overweight margin expansion in spite of 27.6% YoY jump in pay channel costs; and (3) net profit of INR283mn after nine quarters of losses. The only key concern was jump in interest costs to INR141mn (up 23% QoQ) due to MARKET DATA (R: HAWY.BO, B: HATH IN) substantial increase in borrowings (to fund set top boxes). Success in CMP : INR 280 subscriber KYC data and package selection will be important milestones Target Price : INR 352 going forward. With rapid digital subscriber additions, Hathway continues 52-week range (INR) : 307 / 155 to execute the best amongst all MSOs. Maintain ‘BUY’. Share in issue (mn) : 143.2 M cap (INR bn/USD mn) : 40/ 715 Avg. Daily Vol.BSE/NSE(‘000) : 246.7 This report also contains Q4FY13 earnings call highlights.

SHARE HOLDING PATTER N (%) Surge in activation revenue; margin expands 2,106bps YoY Current Q3FY13 Q2FY13 Hathway’s net revenue increased 70.7% YoY to INR2,312mn. As percentage of sales, Promoters * 49.5 49.5 49.6 pay channel cost and other operating expenses plunged 723bps and 1271bps YoY, MF's, FI's & BK’s 21.2 19.2 19.5 respectively, which helped EBITDA margin soar 2,106bps YoY. FII's 23.4 23.9 23.7

Others 6.0 7.4 7.2 Subscriber addition remains robust * Promoters pledged shares : NIL (% of share in issue) Phase II digitisation has helped Hathway garner subscriber addition of 1.5mn in Q4FY13. Total digital subscribers as on date stands at ~6mn while as on FY13 end stood PRIC E PERFORMANCE (%) at ~4.9-5.0mn. Over 60% of data collection from subscribers has been achieved in EW Media Mumbai and Delhi and management expects to complete the process by end June. Stock Nifty Index Hathway has also strengthened its position in cities like Faridabad, Allahabad, 1 month 10.8 3.3 4.8 Bengaluru, etc. It is further targeting new cities and phase 3 as well. 3 months 15.9 7.6 4.3

12 months 68.9 23.7 63.1 Outlook and valuations: Positive; maintain ‘BUY’

Hathway is the best placed MSO to capitalise on the huge digitisation opportunity. It seeded more than 2mn boxes in phase I cities. Also, there is a huge opportunity of adding new subscribers in Phase 2. Currently, the stock is trading at EV/EBITDA of 16x and 12.5x FY14E and FY15E, respectively. Maintain ‘BUY/Sector Outperformer ’ with a target price of INR352.

Financials (INR mn)

Year to March Q4FY13 Q4FY12 % change Q3FY13 % change FY13E FY14E FY15E Abneesh Roy Revenues 2,312 1,355 70.7 1,544 49.7 11,325 15,666 18,562 +91 22 6620 3141 [email protected] EBITDA 885 233 279.5 355 149.5 2,738 3,073 4,047 Reported PAT 283 (68) NM (74) NM 157 (199) 137 Alankar Garude Dil. EPS (INR) 2.0 (0.5) (0.5) 0.9 (1.4) 1.0 +91 22 6623 3301 [email protected] EV/EBITDA (x) 17.3 16.0 12.5

Note: Quarterly numbers are on standalone basis May 30, 2013 Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL , Thomson First Call, Reuters and Factset. Edelweiss Securities Limited

Media

Conference call: Key highlights

Digital subscriber: Total digital subscribers are currently ~6.2mn for Hathway. The company added ~2.4mn subscribers in phase 1, ~3.3mn in Phase 2 and ~0.5mn in Phase 3 (adjoining parts of Phase 1 and 2, but officially part of phase 3). Of the 6.2mn subscribers, ~0.6mn are primary while the balance are secondary subscribers. Hathway seeded ~3mn boxes in FY13. In April and May, the company seeded 1mn boxes and will seed another 0.5mn in June. This pace is expected to slow down going forward. Exit number of boxes seeded in Q4FY13 stood at 1.8mn.

Activation revenue: Hathway’s activation revenue stood at a robust INR876mn in Q4FY13. For FY13 standalone, it stood at INR1,420mn against INR200mn in FY12. At the consolidated level, activation revenue was INR1,940mn in FY13 against INR300mn in FY12.

Subscription revenue: Hathway’s subscription revenue increased by INR170mn YoY in FY13. The number was similar at the consolidated level as consolidated numbers include only nine month numbers of GTPL. Subscription revenues will start kicking in from next quarter, which would aid profits.

Expansion: Hathway has entered several new cities in some states where it has strong presence. The company has also strengthened its position in cities like Faridabad, Allahabad, Bengaluru, etc.

Inventory: Over 1mn boxes of inventory.

Phase 3: Phase 3 seeding in a major way will start from Q4FY14. The company is looking to increase its presence in West Bengal, Maharashtra and Andhra Pradesh during Phase 3.

Carriage revenue: Although carriage revenue for existing channels has been declining, Hathway is earning revenue from new channels and new geographies. Currently, there are near 250 channels which will increase to 300 in FY14.

Billing system: Currently, net billing in Mumbai is ~INR85 (Delhi’s net billing stands at ~INR65). This will increase to INR105 by end June. Thereafter, at gross billing basis, the amount will move up to INR180 (INR80 billed to LCOs and INR100 to Hathway).

Broadband: Hathway’s broadband subscriber base remains at ~0.416mn. Its broadband ARPU is INR300. Mumbai, Pune, Bengaluru and Hyderabad are important cities where the company is looking to improve its technology, which will help increase ARPUs.

Receivables: Receivables increased significantly; however, due to: (1) activations being billed in March; and (2) higher carriage and placement receivables. Adjusting for these, receivables will be flat YoY.

Entertainment tax: MSOs have to pay entertainment tax in Delhi. In Mumbai, there is still ambiguity regarding the same, but is likely to follow the Delhi method. Only some states have decided on this. The company has already started paying the entertainment tax.

Data collection from subscribers: Over 60% has been achieved in Mumbai and Delhi. Management expects to complete the process by end June.

2 Edelweiss Securities Limited Hathway Cable & Datacom

Gross capex FY13 (standalone): INR5.73bn; of which INR5.51bn is capex related to cable TV, the balance capex is related to broadband.

Standalone balance sheet: Hathway’s standalone gross debt stands at INR7.12bn and net debt at INR6.74bn at end FY13. However, debt has jumped in May and currently, gross debt stands at INR10.4bn and net debt at INR10.05bn.

Debt/Equity: D/E ratio stands at 1:1.

Cost of debt: The cost of debt would be ~11% in FY14.

Other key developments

TRAI prescribes standard tariff packages for STBs Telecom Regulatory Authority of India (TRAI) has issued two tariff orders which prescribe standard tariff packages for set top boxes for DAS and consumer premises equipments for DTH service providers. The objective of this order is to make available STBs and CPE at a reasonable price while protecting the interests of service providers. The order contains four options that can be provided to consumers with different rentals and security deposit plans. The standard tariff package is to be mandatorily provided for by DTH and cable TV operators. As per the order, DAS service providers can provide STBs at a monthly rent of INR55.66 or INR50.66 (excluding taxes) if the security deposit is INR400 and INR800, respectively. For DTH service providers, the monthly rent for the CPE can be offered at a rental of INR71.75 per month and INR65.50 per month if the security deposit is INR500 and INR1,000, respectively. DAS service providers can offer STBs at a monthly adjustable rent of INR46.80 or INR32.93 if the security deposit is INR400 and INR800, respectively, while DTH service providers can provide STBs at a monthly adjustable rent of INR60.66 and INR43.32 if the security deposit is INR500 and INR1,000, respectively.

Hathway consolidates to gain from Phase 2 Hathway acquired complete control of its cable TV joint venture with DB Corp’s Bhaskar in which it held 51%. The company acquired the balance 49% stake in the JV Hathway Bhaskar Multinet. Hathway Bhaskar is a cable TV distributor in Bhopal, Indore and Jaipur. This underscores the company’s increased focus on digitisation as it will help increase its footprint in tier 2 and 3 markets.

Jayaraman leaves Hathway for Zee Mr. K Jayaraman, Managing Director and CEO, Hathway, left the company and joined the Zee Group as head of distribution and placement business. He took over the new role from March 12. Mr. Jayaraman had resigned from Hathway after Mr. Jagdish Kumar took over as MD and CEO of the company.

Hathway appoints President for digital platform and EVP for operations Mr. K V Anand, Tata Sky’s ex-Chief Service Officer, has been appointed as President of Hathway’s digital platform. He will be reporting to Mr. Jagdish Kumar, MD and CEO. He has about 20 years of experience in the broadcast and distribution industry. Hathway also appointed Mr. Jagadesh Babu Botta as EVP operations.

3 Edelweiss Securities Limited Media

Table 1: Hathway’s presence in Phase 2 cities: Immense potential Presence of MSO Sizeable presence City State State government Hathway DEN Siti Cable IMCL ZEE Sun TV Bengaluru Karnataka Congress





Hyderabad Andhra Pradesh Congress




Jaipur Rajasthan Congress



Ahmedabad Gujarat BJP


Surat Gujarat BJP



Ludhiana Punjab Akali Dal


Pune Maharashtra Congress


Lucknow Uttar Pradesh SP


Kanpur Uttar Pradesh SP


Nagpur Maharashtra Congress


Indore Madhya Pradesh BJP



Thane Maharashtra Congress



Bhopal Madhya Pradesh BJP


Visakhapatnam Andhra Pradesh Congress

Pimpri-Chinchwad Maharashtra Congress


Patna Bihar JDU


Vadodara Gujarat BJP



Ghaziabad Uttar Pradesh SP

Agra Uttar Pradesh SP

Nashik Maharashtra Congress



Faridabad Haryana Congress




Meerut Uttar Pradesh SP

Rajkot Gujarat BJP


Kalyan-Dombivli Maharashtra Congress



Varanasi Uttar Pradesh SP


Srinagar J&K J&K NC
Aurangabad Maharashtra Congress

Amritsar Punjab Akali Dal

Navi Mumbai Maharashtra Congress




Allahabad Uttar Pradesh SP



Ranchi Jharkhand President's rule


Coimbatore Tamil Nadu AIADMK
Jabalpur Madhya Pradesh BJP

Jodhpur Rajasthan Congress

Chandigarh Chandigarh Union Territory


Howrah West Bengal Trinamool Congress



Solapur Maharashtra Congress

Mysore Karnataka Congress




Total 25 cities 24 cities 16 cities 14 cities 37 cities 5 cities Source: Census 2011, Company websites, Edelweiss research

4 Edelweiss Securities Limited Hathway Cable & Datacom

Fig. 1: Hathway has been regularly advertising in leading newspapers in the metros

Source: Company

Outlook and valuations: Positive; maintain ‘BUY’

Hathway is the best placed MSO to capitalise on the huge digitisation opportunity. The company seeded more than 3mn boxes in FY13. Currently, Hathway’s digital subscriber base stands at ~6.2mn. Hathway has increased its geographic presence and Phase 3 provides further growth opportunities. Compared to DEN, Hathway has a sizeable primary subscriber base, well-entrenched broadband operations and has seeded the highest boxes amongst all MSOs. We assign Hathway an EV/EBITDA target multiple of 15.0x on FY15E as we roll over, arriving at a target price of INR352. Currently, the stock is trading at EV/EBITDA of 16x and 12.5x FY14E and FY15E, respectively. Maintain ‘ BUY/Sector Outperformer ’.

5 Edelweiss Securities Limited Media

Financial snapshot (INR mn) Year to March Q4FY13 Q4FY12 % change Q3FY13 % change FY13 FY14E FY15E Net revenues 2,312 1,355 70.7 1,544 49.7 11,325 15,666 18,562 Pay channel cost 495 388 27.6 430 15.2 4,325 6,611 7,536 Staff costs 105 77 36.8 108 (3.0) 961 1,676 2,005 Other operating expenses 827 657 25.9 651 27.0 3,301 4,305 4,974 Total expenditure 1,427 1,121 27.3 1,189 20.0 8,587 12,592 14,515 EBITDA 885 233 279.5 355 149.5 2,738 3,073 4,047 Depreciation & amortization 442 272 62.6 286 54.3 1,661 2,237 2,601 EBIT 443 (38) NM 68 548.6 1,078 836 1,446 Other income 26 63 (58.5) 14 91.7 115 172 176 Forex Loss/ (Gain) (57) - NM 15 NM - - - Interest 141 113 24.2 114 23.1 602 786 984 Exceptionals 103 (21) NM 27 283.6 36 36 36 Profit before tax 283 (68) NM (74) NM 555 187 602 Tax - - - 179 237 281 Core profit 283 (68) NM (74) NM 376 (51) 320 Extraordinary items - - - 30 - - PAT 283 (68) NM (74) NM 157 (199) 137 No. of shares (mn) 143 143 143 143 143 143 Diluted EPS (INR) 2.0 (0.5) NM (0.5) NM 0.9 (1.4) 1.0

As % of net revenues Pay channel cost 21.4 28.6 27.8 38.2 42.2 40.6 Employee cost 4.5 5.7 7.0 8.5 10.7 10.8 Other operating expenses 35.8 48.5 42.2 29.1 27.5 26.8 EBITDA 38.3 17.2 23.0 24.2 19.6 21.8 Reported net profit 12.2 (5.0) (4.8) 3.3 (0.3) 1.7 Note: Quarterly numbers are on standalone basis; annual consolidated

6 Edelweiss Securities Limited Hathway Cable & Datacom

Company Description Hathway is one the largest MSOs as well as one of the leading cable broadband service providers in India. Having entered the cable and entertainment business in 1995, the company offers three broad services—analog cable television, digital cable television and broadband internet. Its key promoter is the Rajan Raheja Group with a ~49.5% stake. While Hathway currently provides analog TV services in 140 cities, it is the largest digital cable TV provider in India. It is also the first cable TV service provider to offer broadband services in 19 cities. The company has bagged the ‘Best Cable TV Operator of the Year’ award by the Indian Television Awards eight times. Hathway has launched a channel Hathway Music (music channel).

Investment Theme The compulsory digitisation mandate will lead to digitisation of cable TV services across India by CY14 end. Converting its existing analog subscriber base on the digital platform will provide Hathway a huge opportunity to increase subscription revenue due to lower under- declaration and higher ARPU. Hathway’s digitisation progress is on track and the company will be looking to build on to its broadband subscriber base as well.

Key Risks • DTH players can leverage on first mover, stronger brand advantage

• Fund raising may be required in subsequent phases

• Loss of subscribers if LCOs shift loyalties

• Intense competition may limit ARPU growth

7 Edelweiss Securities Limited Media

Financial Statements

Key Assumptions Income statement (INR mn) Year to March FY12 FY13E FY14E FY15E Year to March FY12 FY13E FY14E FY15E Macro Net revenue 10,121 11,325 15,666 18,562 GDP(Y -o-Y %) 6.5 5.0 6.5 7.0 Pay channel cost 4,295 4,325 6,611 7,536 Inflation (Avg) 8.8 7.8 6.0 6.0 Other operating expenses 3,224 3,301 4,305 4,974 Repo rate (exit rate) 8.5 7.5 6.8 6.0 Employee costs 926 961 1,676 2,005 USD/INR (Avg) 47.9 54.5 55.0 53.0 Total operating expenses 8,445 8,587 12,592 14,515 Company EBITDA 1,676 2,738 3,073 4,047 Sales assumptions Depreciation & Amortization 1,409 1,661 2,237 2,601 Digital subscriber additions (mn) - 2 2 2 EBIT 268 1,078 836 1,446 Digital subscribers (mn) 2 4 6 8 Other income 131 115 172 176 Primary subscribers' ARPU (INR) 172 180 195 200 Interest expenses 520 602 786 984 Broadband subscriber additions (mn) - - - - Exceptionals 148 36 36 36 Broadband subscribers (mn) 0.4 0.5 0.6 0.7 Profit before tax (269) 555 187 602 Broadband ARPU (INR) 305.0 312.0 325.0 330.0 Provision for tax 153 179 237 281 Placement & Carriage Revenue growth (%) 21.5 (15.0) (20.0) (20.0) Net profit (422) 376 (51) 320 Broadband revenue (% of rev.) 14.4 13.4 14.6 14.4 Extraordinary income/ (loss) 32 30 - - Cost assumptions Profit After Tax (390) 406 (51) 320 Pay channel costs (% of rev.) 42.4 42.4 42.2 40.6 Minority interest 102 249 148 183 Prov. for Bad & Doubtful Debts/Bad Debts (% of 4.5 4.5 4.5 4.5 Profit after minority interest (492) 157 (199) 137 Personnel cost (% of rev.) 9.1 10.5 10.7 10.8 Shares outstanding (mn) 143 143 143 143 Admin and other expenses (% of rev.) 12.3 10.8 9.6 8.9 Diluted EPS (INR) (3.7) 0.9 (1.4) 1.0 Ad & publicity expenses (% of rev.) 0.8 1.0 1.0 0.8

Bandwidth & Lease Line Cost (% of rev) 2.8 2.8 2.7 2.7 Common size metrics Financial assumptions Year to March FY12 FY13E FY14E FY15E Capex (INR mn) 2,338 3,500 3,800 3,400 Pay channel cost 42.4 38.2 42.2 40.6 Debtor days 87 87 95 100 Other operational expenses 31.9 29.1 27.5 26.8 Inventory days 4 4 4 4 Employee expenses 9.1 8.5 10.7 10.8 Payable days 119 119 115 110 EBITDA margins 16.6 24.2 19.6 21.8 Cash conversion cycle (days) (28) (28) (16) (6) Net profit margins (4.2) 3.3 (0.3) 1.7 Interest rate on o/standing debt (%) 11.0 12.0 12.0 12.0

Depreciation as % of gross block 9.8 10.2 10.2 10.2 Growth ratios (%) Year to March FY12 FY13E FY14E FY15E Revenues 14.7 11.9 38.3 18.5 EBITDA 11.7 63.3 12.2 31.7

8 Edelweiss Securities Limited Hathway Cable & Datacom

Balance sheet (INR mn) Cash flow metrics As on 31st March FY12 FY13E FY14E FY15E Year to March FY12 FY13E FY14E FY15E Equity capital 1,429 1,429 1,429 1,429 Operating cash flow 1,636 1,878 3,156 3,188 Reserves & surplus 6,598 6,755 6,556 6,695 Investing cash flow (1,515) (3,624) (3,884) (3,496) Shareholders funds 8,028 8,185 7,986 8,124 Financing cash flow (147) 1,058 1,114 416 Minority interest (BS) 1,802 2,052 2,200 2,383 Net cash flow (26) (687) 386 108 Short term debt 1,241 1,600 2,000 2,500 Capex (2,338) (3,500) (3,800) (3,400) Long term debt 2,700 4,000 5,500 6,400

Borrowings 3,940 5,600 7,500 8,900 Profitability & efficiency ratios Deferred tax liability 103 103 103 103 Year to March FY12 FY13E FY14E FY15E Sources of funds 13,873 15,939 17,788 19,510 ROAE (%) (5.3) 4.9 (0.7) 4.1 Tangible assets 6,969 8,808 10,627 11,699 ROACE (%) 2.1 7.3 5.0 7.8 Intangible assets 2,244 2,483 2,484 2,483 Inventory day 4 4 4 4 CWIP (incl. intangible) 1,005 1,005 1,005 1,005 Debtors days 87 87 95 100 Total net fixed assets 10,219 12,297 14,116 15,187 Payable days 119 119 115 110 Goodwill on consolidation 1,947 1,947 1,947 1,947 Current ratio 1.4 1.4 1.3 1.4 Non current investments 53 53 53 53 Debt/EBITDA 2.4 2.0 2.4 2.2 Current Investments 105 105 105 105 Debt/Equity 0.5 0.7 0.9 1.1 Cash and equivalents 976 289 675 783 Adjusted debt/equity 0.5 0.7 0.9 1.1 Inventories 55 48 109 70 Interest coverage 0.5 1.8 1.1 1.5 Sundry debtors 2,492 3,083 5,226 5,099

Loans and advances 1,693 1,693 1,693 1,693 Operating ratios Other current assets 229 229 229 229 Year to March FY12 FY13E FY14E FY15E Total current assets (ex cash) 4,628 5,211 7,416 7,249 Total asset turnover 0.7 0.8 0.9 1.0 Total current liabilities & 3,896 3,804 6,365 5,656 Fixed asset turnover 1.5 1.4 1.6 1.7 Net current assets (ex cash) 732 1,407 1,051 1,593 Equity turnover 1.2 1.4 1.9 2.3 Uses of funds 13,873 15,939 17,788 19,510

Book value per share (INR) 56.2 57.2 55.8 56.7 Valuation parameters Year to March FY12 FY13E FY14E FY15E

Free cash flow (INR mn) Diluted EPS (INR) (3.7) 0.9 (1.4) 1.0 Year to March FY12 FY13E FY14E FY15E CEPS (INR) 6.3 12.5 14.2 19.1 Net profit (492) 157 (199) 137 Price/BV (x) 5.0 4.9 5.0 4.9 Depreciation 1,409 1,661 2,237 2,601 EV/Sales (x) 4.4 4.2 3.1 2.7 Deferred tax 14 - - - EV/EBITDA (x) 26.7 17.3 16.0 12.5 Others 258 (615) 1,474 (92) FCFPS (INR) (4.9) (11.3) (4.5) (1.5)

Gross cash flow 1,188 1,203 3,512 2,646 Less: Changes in WC (448) (675) 356 (542) Operating cash flow 1,636 1,878 3,156 3,188 Less: Capex 2,338 3,500 3,800 3,400 Free cash flow (702) (1,622) (644) (212)

Pe er comparison valuation Market cap Diluted PE (X) EV/EBITDA (X) EV/Sales (X) Name (USD mn) FY14E FY15E FY14E FY15E FY14E FY15E Hathway Cable & Datacom 715 - - 16.0 12.5 3.1 2.7 DEN Networks 567 38.2 20.4 11.0 7.3 2.5 1.8 Dish TV India 1,247 - - 10.8 8.2 3.0 2.4 Sun TV Network 2,954 18.5 15.4 9.0 7.2 6.8 5.6 Zee Entertainment Enterprises 4,014 28.1 23.8 18.6 15.3 5.1 4.5 AVERAGE - 16.0 11.3 12.1 9.3 3.7 3.1 Source: Edelweiss research

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Additional Data

Directors Data Bharat Shah Chairman, Independent Director Rajan Raheja Non - executive & Non Independent Director Akshay Raheja Non - executive & Non Independent Director Viren Raheja Non - executive & Non Independent Director K. Jayaraman MD & CEO Vinayak Aggarwal Non - executive & Independent Director Brahmal Vasudevan Independent Director Sasha Mirchandani Independent Director Sridhar Gorthi Independent Director Devendra Shrotri Independent Director Biswajit Subramanian Additional Director

Auditors - G. M. Kapadia & Co. *as per last annual report

Holding - Top10 Perc. Holding Perc. Holding P6 Mauritius India Holding 9.88 Providence Equity Advisors 9.88 Reliance Capital Trustee Co Ltd 8.88 Macquarie Bank Limited 7.37 Reliance Equity Opport FD 5.34 Infrastructure Ind Hldg FD 3.89 Norges Bank 2.15 Uti Asset Management Co Ltd 1.85 Govt Pension Fund Global 1.54 Tree Line Asia Master Fund 1.03 *as per last available data

Bulk Deals Data Acquired / Seller B/S Qty Traded Price

No Data Available

*in last one year

Insider Trades Reporting Data Acquired / Seller B/S Qty Traded

No Data Available

*in last one year

10 Edelweiss Securities Limited RATING & INTERPRETATION

Company Absolute Relative Relative Company Absolute Relative Relative reco reco risk reco reco Risk DEN Networks BUY SP M Dish TV India BUY SP M Hathway Cable & Datacom BUY SO M Jagran Prakashan BUY SP M PVR BUY SP M Sun TV Network BUY SP M Zee Entertainment Enterprises BUY SO M

ABSOLUTE RATING

Ratings Expected absolute returns over 12 months

Buy More than 15%

Hold Between 15% and - 5%

Reduce Less than -5%

RELATIVE RETURNS RATING

Ratings Criteria Sector Outperformer (SO) Stock return > 1.25 x Sector return

Sector Performer (SP) Stock return > 0.75 x Sector return

Stock return < 1.25 x Sector return

Sector Underperformer (SU) Stock return < 0.75 x Sector return

Sector return is market cap weighted average return for the coverage universe within the sector

RELATIVE RISK RATING

Ratings Criteria

Low (L) Bottom 1/3rd percentile in the sector

Medium (M) Middle 1/3rd percentile in the sector

High (H) Top 1/3rd percentile in the sector

Risk ratings are based on Edelweiss risk model

SECTOR RATING

Ratings Criteria Overweight (OW) Sector return > 1.25 x Nifty return

Equalweight (EW) Sector return > 0.75 x Nifty return

Sector return < 1.25 x Nifty return

Underweight (UW) Sector return < 0.75 x Nifty return

11 Edelweiss Securities Limited Media

Edelweiss Securities Limited, Edelweiss House, off C.S.T. Road, Kalina, Mumbai – 400 098. Board: (91-22) 4009 4400 , Email : [email protected] Vikas Khemani Head Institutional Equities vikas.khemani@edel weissfin .com +91 22 2286 4206

Nischal Maheshwari Co-Head Institutional Equities & Head Research [email protected] +91 22 4063 5476

Nirav Sheth Head Sales [email protected] +91 22 4040 7499

Coverage group(s) of stocks by primary analyst(s): Media DEN Networks, Dish TV India, Hathway Cable & Datacom, Jagran Prakashan, PVR, Sun TV Network, Zee Entertainment Enterprises

Recent Research

Date Company Title Price (INR) Recos

29 -May -13 PVR Minor speed bump, but long 341 Buy term picture intact; Result Update 23 -May -13 Dish TV India Q4 dips, long term growth 64 Buy story stays; Result Update 22 -May -13 ZEE Sailing smooth ; 241 Buy Result Update

Distribution of Ratings / Market Cap

Edelweiss Research Coverage Universe Rating Interpretation

Buy Hold Reduce Total Rating Expected to

Rating Distribution* 120 49 17 186 Buy appreciate more than 15% over a 12-month period * - stocks under review Hold appreciate up to 15% over a 12-month period > 50bn Between 10bn and 50 bn < 10bn

Reduce depreciate more than 5% over a 12 -month period Market Cap (INR) 118 56 12

12 Edelweiss Securities Limited Hathway Cable & Datacom

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