Share of Walt Disney (DIS 1.26%) have enjoyed significant gains over the past month, up 32% since July 15 as investors cheered its latest results. However, not everything is glittering in the Magic Kingdom. The company could be gearing up to lose millions of subscribers from its biggest market. 

Here's why Disney stock's current growth may not last past this quarter. 

Revising subscriber targets

On Aug. 10, Disney published better-than-expected earnings results. Total Disney+ subscriptions rose to 152.1 million during its 2022 third quarter when previous forecasts expected 147 million members. The company's revenue also grew by 26%, with bullish investors pushing the stock up 10% since Disney posted the Q3 report. However, while Disney enjoyed a glowing Q3 2022, investors will want to be aware of potential subscriber losses in its biggest market that could impact its fourth-quarter earnings. 

In December 2020, Disney projected that Disney+ would reach 230 million to 260 million paid subscribers by 2024. The company specified that India's version of the platform, Disney+ Hotstar, would make up 30% to 40% of all members with its expected 70 million to 100 million subscriber target. However, during an earnings call on Aug. 11, Disney CFO Christine McCarthy lowered the company's Hotstar forecasts to a 80 million subscribers by the end of 2024. 

In addition to its refined Hotstar numbers, Disney lowered its guidance for Disney+ as a whole by 15 million subscribers, projecting the platform would reach 215 million to 245 million members by 2024. The updated figures lowered subscription projections by 6.5%, illustrating the significance of the Indian streaming market.  

Navigating a crucial market

Disney's acquisition of 21st Century Fox in 2019 is the purchase that keeps on giving. In addition to a lucrative content library, it also made the company the owner of India's largest streaming service, Hotstar -- now Disney+ Hotstar. The streaming service gave Disney+ a significant boost as all of Hotstar's subscribers were effectively absorbed into Disney's flagship platform in 2020. As a result, India continues to be Disney's biggest streaming market, with its subscriber base making up 38% of all Disney+ members. Considering how crucial India is for Disney's streaming growth, its decreased subscriber projections could significantly affect the company's earnings and success in the industry.

In Disney's Q3 2022, Disney+ Hotstar revenue had the largest growth of any region, rising by 54% over the last year. Meanwhile, domestic Disney+ revenue fell by 5% in the U.S. and Canada but rose by 14% in the international territories, excluding Hotstar. Even while Disney+ Hotstar is arguably the oldest version of Disney+, it continues to see immense growth and outshine all other regions.

On the same earnings call, McCarthy spoke about Disney's decision not to renew the streaming rights for India Premiere League (IPL) cricket matches -- by far the country's most popular sport. "At Disney+ Hotstar, subscribers increased by over 8 million as the IPL concluded its 15th season in the quarter," she said. Although Disney will retain the traditional TV broadcasting rights to the IPL, the streaming rights now belong to a competing platform, Viacom18.  

As Disney+ Hotstar drops the IPL, the company is set to lose a significant number of subscribers in India. While Q4 2022 earnings are still a while off, it's necessary to be aware of any impactful subscriber changes in the vital market.

Is Disney a buy?

Disney stock has rallied over the past month, seeing significant gains as investors put their faith in the company after pleasing Q3 results. The stock price could well continue growing in the run-up to the launch of Disney+'s ad-supported service in December as well as a price hike coming to all of the company's streaming services. The price increase is positive as it will raise Disney's average revenue per user, likely to boost profits. 

However, the company's stock may experience a dip in November due to Indian subscriber losses. Streaming investors will want to keep an eye on any news concerning Disney+ Hotstar, considering its critical role in the company's streaming growth. Disney remains a safe streaming stock thanks to its strong presence in the industry, so it would be prudent to hold if a dip does occur. Additionally, if planned price hikes go well, a drop in subscribers may not be detrimental to revenue as the company can recoup its losses from other markets.