Stock outlook: Cable Digitization brings festivity in cable stocks

by khalid on 15/10/2011 · 0 comments

Companies into cable service provisioning and broadcastings have shot up by a whopping 15 % on the Sensex after it had been declared that th government of India had approved the long standing ordinance of digitization of the cable network. The companies which saw the uptrend included Wire and Wireless India &Hathway Cable.

The ordinance had not been sent for the consideration of the President by the government as it had been decided earlier and Ambika Soni, the information &broadcasting minister informed that the ordinance was passed in a Cabinet meeting that was chaired by the Prime Minister, Manmohan Singh.

The ordinance provides the mandate to finish all digitization in the metro cities by 2012 and should cover the entire country by 2014. The cable & satellite industry is a whopping Rs. 20000 crore industry and digitization would certainly help and boost the industry. Digitization is expected to give a boost to subscription revenues while also helping in reducing the carriage fee of broadcasters. This should help the margins of these cable companies. Hathway Cable rose by 17% while Den Networks saw a rise of 9%. Dish Tv also rallied by 7% on the Sensex.

‘Bell the Bull’ says that the sector is extremely politicised and too much of reliance on the positive side looks dangerous unless something concrete is seen happening. Presently any investments in the cable company stock shall put any investor in an unpredictable situation because the past of the government announcements with this industry have been dismal and many progresses have been disrupted.

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