The stock, currently trading at ₹109.05, has underperformed significantly over the past year, declining 31.82% compared to the Sensex's marginal 0.07% gain. This substantial underperformance has prompted analysts to maintain a cautious stance on the counter, with the company's proprietary score standing at just 26 out of 100, firmly in "Strong Sell" territory.
The quarter's performance highlights a concerning trend for GTPL Hathway: whilst the company has managed to grow its top line at a reasonable pace, profitability has deteriorated sharply. Net sales for Q2 FY26 reached ₹959.05 crores, marking a 12.10% year-on-year increase and a 6.12% sequential improvement from Q1 FY26's ₹903.70 crores. However, this revenue growth has failed to translate into bottom-line expansion, with the company's profit after tax margin compressing to a mere 0.75% in the latest quarter.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | Net Profit (₹ Cr) | YoY Change | Operating Margin |
|---|---|---|---|---|---|
| Sep'25 | 959.05 | +6.12% | 8.96 | -26.19% | 10.87% |
| Jun'25 | 903.70 | +1.43% | 10.57 | -27.30% | 11.83% |
| Mar'25 | 890.99 | +0.42% | 11.79 | -12.54% | 11.95% |
| Dec'24 | 887.27 | +3.71% | 9.27 | -60.27% | 11.88% |
| Sep'24 | 855.56 | +1.45% | 12.14 | -64.70% | 12.55% |
| Jun'24 | 843.37 | +4.38% | 14.54 | -59.62% | 13.43% |
| Mar'24 | 807.98 | -5.04% | 13.48 | -224.93% | 13.97% |
| Dec'23 | 850.88 | +9.20% | 23.33 | -36.57% | 14.19% |
Financial Performance: Revenue Growth Masks Profitability Crisis
GTPL Hathway's Q2 FY26 results present a troubling picture of deteriorating operational efficiency. Whilst net sales grew 12.10% year-on-year to ₹959.05 crores, operating profit excluding other income declined to ₹104.24 crores from ₹107.37 crores in the corresponding quarter last year. This represents a 2.91% year-on-year decline in absolute operating profit despite double-digit revenue growth, highlighting severe margin compression.
The operating margin excluding other income contracted sharply to 10.87% in Q2 FY26 from 12.55% in Q2 FY25, marking a deterioration of 168 basis points. This margin erosion has been consistent over the past several quarters, with the company's operating margin steadily declining from a peak of 15.96% in September 2023. The trend suggests structural challenges in the business model, with revenue growth failing to keep pace with rising costs.
On a half-yearly basis for H1 FY26 (April-September 2025), the company reported consolidated net profit of ₹19.53 crores on revenues of ₹1,862.75 crores. This represents a significant 26.75% decline in profitability compared to the same period last year, despite a 9.58% increase in revenues. The profit after tax margin for H1 FY26 stood at just 1.05%, down from 1.57% in H1 FY25.
Interest expenses increased substantially to ₹8.72 crores in Q2 FY26 from ₹6.03 crores in Q2 FY25, representing a 44.61% year-on-year surge. This sharp increase in financing costs, despite the company maintaining a relatively low debt-to-equity ratio of 0.17, has further pressured profitability. Depreciation expenses remained elevated at ₹90.88 crores, consistent with the capital-intensive nature of the cable and broadband infrastructure business.
Operational Challenges: Margin Compression and Rising Costs
The deteriorating financial performance at GTPL Hathway reflects deeper operational challenges facing the company. The most concerning aspect is the consistent decline in operating margins over the past eight quarters. From a robust 15.96% in September 2023, operating margins have compressed by over 500 basis points to 10.87% in the latest quarter. This suggests the company is struggling to pass on rising costs to customers, likely due to intense competition in the cable television and broadband services sector.
Return on equity (ROE) has plummeted to just 4.12% in Q2 FY26, significantly below the company's five-year average of 13.41%. This weak ROE indicates poor capital efficiency, with the company generating minimal returns for shareholders despite maintaining a healthy equity base of ₹1,163.91 crores. The return on capital employed (ROCE) similarly stands at a disappointing 4.68%, well below the five-year average of 18.15%, highlighting deteriorating returns across the business.
⚠ Critical Concern: Quality of Earnings Under Pressure
A worrying aspect of Q2 FY26 results is the increasing reliance on other income to support profitability. Other income of ₹5.88 crores represented a substantial 54.55% of profit before tax in the quarter. This high proportion of non-operating income relative to operating profit raises questions about the sustainability of earnings and suggests the core business is struggling to generate adequate returns.
Employee costs have remained relatively stable at ₹41.78 crores in Q2 FY26, marginally higher than ₹41.44 crores in the year-ago quarter. However, as a percentage of revenues, employee costs have actually improved from 4.84% to 4.36%, indicating some operational efficiency gains. The real pressure appears to be coming from other operating expenses, which have grown faster than revenues, leading to the margin compression.
The company's balance sheet remains reasonably healthy, with total debt of ₹228 crores against shareholder funds of ₹1,163.91 crores, resulting in a debt-to-equity ratio of just 0.17. Net debt stands at ₹112 crores, with the company maintaining ₹24 crores in cash and equivalents as of March 2025. The interest coverage ratio of 10.20 times provides adequate cushion for debt servicing, though this has deteriorated from more comfortable levels in previous years.
Industry Context: Broadcasting Sector Under Pressure
GTPL Hathway operates in a highly competitive and rapidly evolving television broadcasting and broadband services sector. The industry has faced significant headwinds in recent years, with the shift towards over-the-top (OTT) streaming platforms disrupting traditional cable television business models. Additionally, intense competition from telecom operators offering bundled broadband and entertainment services has pressured pricing power and margins across the sector.
The company's underperformance is not isolated, with the broader TV Broadcasting & Software sector delivering a negative 34.18% return over the past year. However, GTPL Hathway has managed to outperform its sector by 2.36 percentage points, suggesting some relative resilience despite the challenging environment. Nevertheless, the absolute performance remains deeply concerning for investors.
Looking at the five-year compound annual growth rate (CAGR), GTPL Hathway has achieved sales growth of 7.78%, which is reasonable but not exceptional given the capital-intensive nature of the business. The company has historically maintained strong returns on capital, with an average ROCE of 18.15% over five years, though this has deteriorated sharply in recent quarters. The company's ability to restore these historical return levels will be critical to its investment appeal.
Peer Comparison: Valuation Appears Reasonable but Quality Concerns Persist
| Company | P/E Ratio (TTM) | P/BV Ratio | ROE % | Debt/Equity | Dividend Yield |
|---|---|---|---|---|---|
| GTPL Hathway | 27.71x | 1.05x | 4.12% | 0.17 | 1.83% |
| Media Matrix | 346.56x | 11.51x | 3.28% | 0.33 | 0.00% |
| NDTV | NA (Loss Making) | 18.26x | -367.94% | 5.58 | 0.00% |
| Signpost India | 34.84x | 6.00x | 15.36% | 0.58 | 0.20% |
Within its peer group, GTPL Hathway trades at relatively attractive valuation multiples. The company's price-to-earnings ratio of 27.71 times is significantly lower than Media Matrix's 346.56 times and Signpost India's 34.84 times. Similarly, the price-to-book value ratio of 1.05 times appears reasonable compared to peers trading at substantial premiums to book value.
However, valuation alone does not tell the complete story. GTPL Hathway's ROE of 4.12%, whilst higher than Media Matrix's 3.28%, lags significantly behind Signpost India's 15.36%. This suggests that the lower valuation multiples may be justified by inferior return characteristics rather than representing a genuine bargain. The company's low debt-to-equity ratio of 0.17 is a positive, providing financial flexibility, though this advantage is offset by the weak profitability profile.
GTPL Hathway offers a dividend yield of 1.83%, having declared a dividend of ₹2 per share with an ex-dividend date of 19 September 2025. The dividend payout ratio of 42.04% over the past five years suggests a reasonable balance between shareholder returns and capital retention, though the sustainability of this payout is questionable given the declining profitability trend.
Valuation Analysis: Fair but Not Compelling
At the current market price of ₹109.05, GTPL Hathway trades at 27.71 times trailing twelve-month earnings and 1.05 times book value. The stock has declined 35.05% from its 52-week high of ₹167.90, though it remains 21.17% above its 52-week low of ₹90.00. The valuation assessment of "Fair" suggests the stock is neither significantly overvalued nor undervalued at current levels, with the price broadly reflecting the company's deteriorating fundamentals.
The enterprise value-to-EBITDA multiple of 3.34 times appears attractive on the surface, particularly for a capital-intensive infrastructure business. However, this low multiple reflects market concerns about the sustainability of current EBITDA levels given the consistent margin compression. The EV/Sales ratio of 0.40 times similarly suggests the market is ascribing limited value to the company's revenue base, given profitability challenges.
Historical valuation context is important here. The stock's valuation grade changed from "Attractive" to "Fair" on 30 September 2025 at ₹108.10, reflecting the market's reassessment of the company's prospects following the weak quarterly results. Prior to that, the stock had briefly been rated "Attractive" from 25 September 2025, suggesting significant volatility in market perceptions.
Shareholding Pattern: Stable Promoter Base, Limited Institutional Interest
| Category | Jun'25 | Mar'25 | Dec'24 | QoQ Change |
|---|---|---|---|---|
| Promoter Holding | 75.00% | 75.00% | 75.00% | 0.00% |
| FII Holding | 8.40% | 8.40% | 8.61% | 0.00% |
| Mutual Fund | 0.00% | 0.00% | 0.00% | 0.00% |
| Insurance | 0.00% | 0.00% | 0.00% | 0.00% |
| Non-Institutional | 16.60% | 16.60% | 16.39% | 0.00% |
GTPL Hathway's shareholding pattern reveals a stable promoter base holding 75.00% of equity, with no pledging of shares—a positive indicator of promoter confidence. The promoter group is led by Hathway Cable And Datacom Limited with 37.32% and Pruthvi Broadcasting Services Private Limited with 21.09%. This concentrated promoter holding provides stability but limits free float available for trading.
A concerning aspect is the minimal institutional interest in the stock. Foreign institutional investors hold just 8.40% of equity, whilst mutual funds and insurance companies have zero exposure. The complete absence of domestic institutional investor interest signals a lack of confidence in the company's prospects amongst professional fund managers. The number of FII holders has marginally increased from 11 to 12, but this represents minimal incremental interest.
Non-institutional holdings have remained stable at 16.60%, with the number of non-institutional holders increasing from 28,951 to 29,409. This suggests some retail investor interest, though the overall institutional void remains a significant concern for the stock's liquidity and valuation support.
Stock Performance: Significant Underperformance Across All Timeframes
| Period | GTPL Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +1.58% | +0.13% | +1.45% |
| 1 Month | -5.17% | +0.15% | -5.32% |
| 3 Months | -4.88% | -0.27% | -4.61% |
| 6 Months | +1.49% | +9.14% | -7.65% |
| YTD | -20.37% | +4.98% | -25.35% |
| 1 Year | -31.82% | +0.07% | -31.89% |
| 3 Years | -29.39% | +41.63% | -71.02% |
GTPL Hathway's stock performance has been deeply disappointing across virtually all timeframes. Over the past year, the stock has declined 31.82%, massively underperforming the Sensex which gained 0.07%, resulting in a negative alpha of 31.89 percentage points. The three-year performance is even more concerning, with the stock down 29.39% whilst the Sensex surged 41.63%, representing a staggering 71.02 percentage point underperformance.
Year-to-date, GTPL Hathway has declined 20.37% compared to the Sensex's 4.98% gain, placing it firmly in underperformer territory. The stock's high beta of 1.50 indicates it tends to move 50% more than the broader market, amplifying both gains and losses. With the stock in a bearish technical trend since 22 September 2025, the high beta characteristics have worked against shareholders, accelerating the downward momentum.
The stock currently trades below all key moving averages—5-day (₹106.92), 20-day (₹111.07), 50-day (₹114.52), 100-day (₹115.54), and 200-day (₹115.15)—indicating sustained selling pressure. Technical indicators across timeframes show bearish signals, with MACD, Bollinger Bands, and KST all pointing to continued weakness. The stock's risk-adjusted return of -0.81 over the past year, combined with high volatility of 39.11%, places it in the "high risk, low return" category.
"With operating margins compressing by over 500 basis points in two years and ROE collapsing to just 4.12%, GTPL Hathway's investment case has deteriorated significantly despite reasonable valuation multiples."
Investment Thesis: Weak Fundamentals Outweigh Valuation Appeal
GTPL Hathway's investment thesis faces significant headwinds. The company's proprietary score of 26 out of 100 places it firmly in "Strong Sell" territory, down from 28 in late September. This low score reflects the confluence of negative factors: deteriorating quarterly financial trends, bearish technical momentum, weak return on equity, and compressed operating margins.
The Mojo 4 Dots analysis reveals a troubling picture across all key parameters. Near-term drivers are decidedly negative, with quarterly financial trends rated as "Negative" for two consecutive quarters and technical indicators showing persistent bearish signals. The quality assessment stands at "Average," having deteriorated from "Good" earlier in 2025, reflecting the sustained margin pressure and declining return metrics.
Whilst the valuation is rated as "Fair," this provides limited comfort given the fundamental deterioration. A fair valuation on declining earnings is not an attractive proposition for investors. The company's financial trend has been negative since March 2025, with key concerns including profit before tax falling 57.47%, net profit declining 27.90%, and operating profit margins hitting multi-quarter lows of 10.87%.
Key Strengths & Risk Factors
Key Strengths
- Low Leverage: Debt-to-equity ratio of just 0.17 provides financial flexibility and minimal solvency risk
- No Promoter Pledging: Zero pledged shares indicate strong promoter confidence and commitment
- Stable Promoter Base: 75% promoter holding ensures management continuity and strategic stability
- Revenue Growth Momentum: 12.10% YoY top-line growth demonstrates ability to expand market presence
- Dividend Track Record: Consistent dividend payments with 42.04% payout ratio over five years
- Reasonable Valuation: Trading at 1.05x book value and 27.71x earnings, below several peers
Key Concerns
- Severe Margin Compression: Operating margins declined from 15.96% to 10.87% over two years, a 509 bps deterioration
- Collapsing ROE: Return on equity of 4.12% is significantly below 13.41% five-year average
- Weak Profitability: PAT margin of just 0.75% indicates minimal bottom-line conversion from revenues
- Negative Financial Trend: Quarterly results showing consistent deterioration for two consecutive quarters
- Zero Institutional Interest: Complete absence of mutual fund and insurance holdings signals lack of professional investor confidence
- Bearish Technical Trend: Stock below all moving averages with persistent selling pressure
- High Reliance on Other Income: Non-operating income represents 54.55% of PBT, raising sustainability concerns
Outlook: What to Watch
Positive Catalysts
- Stabilisation of operating margins above 12% for two consecutive quarters
- Return on equity improving back towards 10%+ levels
- Institutional investor interest emerging with mutual fund or insurance participation
- Cost rationalisation initiatives showing tangible results in expense ratios
- Market share gains in broadband segment driving sustainable revenue growth
Red Flags to Monitor
- Further deterioration in operating margins below 10%
- Continued decline in absolute operating profit despite revenue growth
- Increasing reliance on other income to support profitability
- ROE remaining below 5% for extended periods
- Any reduction in promoter holding or emergence of share pledging
The Verdict: Avoid Until Fundamental Turnaround Emerges
Score: 26/100
For Fresh Investors: Avoid initiating positions. The combination of deteriorating margins, collapsing ROE, and negative financial trends presents significant downside risk. Whilst valuation appears reasonable, it reflects genuine fundamental concerns rather than an attractive entry opportunity. Wait for at least two consecutive quarters of margin stabilisation and profitability improvement before considering entry.
For Existing Holders: Consider reducing exposure on any technical bounce towards the ₹115-120 resistance zone. The stock's bearish technical trend, combined with weakening fundamentals, suggests limited near-term upside potential. The high beta of 1.50 amplifies downside risk in a bearish environment. Maintain strict review of quarterly results for signs of operational turnaround.
Fair Value Estimate: ₹95-100 (10-13% downside from current levels) based on sustainable earnings power and peer valuations, assuming no improvement in operating metrics.
GTPL Hathway's Q2 FY26 results underscore the significant operational challenges facing the company. Whilst the business continues to generate revenue growth, the inability to convert this into profitable growth represents a fundamental flaw in the current business model. The 26.19% year-on-year decline in net profit, coupled with operating margins at multi-quarter lows, suggests the company is caught in a difficult competitive environment with limited pricing power.
The stock's technical weakness, with bearish signals across all timeframes and positioning below all key moving averages, reinforces the negative fundamental picture. The complete absence of institutional investor interest serves as a clear warning signal, indicating professional fund managers see limited value in the current risk-reward profile. Until GTPL Hathway demonstrates sustainable margin improvement and return metrics consistent with its historical averages, the investment case remains unconvincing despite seemingly reasonable valuation multiples.
