MUMBAI: Once a linchpin of India’s cable and broadband revolution, Den Networks now finds itself grappling with the seismic shifts of the digital era.

As 5G continues its relentless march across urban India, the cable giant-helmed by CEO S.N. Sharma and co-founded by Sameer Manchandana-reported lukewarm financial results for Q3 FY25, highlighting the mounting pressures of an evolving market.

While operational focus remains intact, Den's revenue growth and profitability paint a picture of an industry at a crossroads, battling the twin challenges of rising competition and technological disruption.

Will Den Networks hold its ground, or is this the beginning of the end for traditional cable dominance in India's digital ecosystem?

For Q3 FY25, Den Networks' standalone revenue from operations decreased by 3.1 per cent year-on-year (YoY), dropping to Rs 2,582.96 million from Rs 2,666.69 million in Q3 FY24. The nine-month revenue also declined by 8.0 per cent to Rs 7,455.83 million compared to Rs 8,105.98 million during the same period last year. On a consolidated basis, the quarterly revenue from operations stood at Rs 2,607.04 million, marking a 4.5 per cent dip YoY.

The decline in revenue is primarily attributed to lower cable distribution revenues and intensified competition in the broadband sector. The cable distribution network generated Rs 2,495.73 million in Q3 FY25, compared to Rs 2,648.03 million in Q3 FY24, reflecting a 5.7 per cent YoY drop. The broadband segment, however, posted a notable improvement, contributing Rs 111.31 million in Q3 FY25, up 36.8 per cent from Rs 81.34 million in the prior year.

Den Networks reported a standalone profit after tax (PAT) of Rs 231.17 million for Q3 FY25, a significant 43.6 per cent decline from Rs 409.96 million in Q3 FY24. The consolidated PAT showed a similar downward trend, standing at Rs 419.29 million for Q3 FY25, down 12.4 per cent from Rs 478.58 million a year earlier.

Increased operational expenses compounded profitability challenges. Content costs for the quarter rose to Rs 1,577.03 million, accounting for 61.1 per cent of revenue from operations, compared to 57.3 per cent in Q3 FY24. Depreciation and amortisation expenses remained elevated at Rs 179.95 million, reflecting sustained investments in infrastructure.

For the nine months ended 31 December 2024, standalone PAT stood at Rs 934.07 million, a sharp decline of 30.3 per cent from Rs 1,340.25 million during the same period last year. Consolidated nine-month PAT came in at Rs 1,368.69 million, showing a marginal 0.8 per cent increase compared to Rs 1,357.43 million in the previous year.

Den Networks faces an uphill task in reviving its growth trajectory. The cable business, contributing the bulk of revenues, continues to face pricing pressures and subscriber churn due to the growing shift towards over-the-top (OTT) platforms. Broadband, while exhibiting growth, remains a small portion of the overall revenue.

The company's operational margins also face challenges. The EBITDA margin compressed as placement fees and employee benefits expenses rose YoY, reflecting increased competitive and operational demands.

While Den Networks' focus on broadband growth is commendable, the overall decline in revenue and profitability highlights the pressing need for strategic adjustments. Addressing challenges in the cable segment, optimising operational efficiencies, and capitalising on digital opportunities will be critical for long-term sustainability.