About HFCL Ltd
HFCL Limited is a renowned technological company specialising in the production of advanced Transmission and Access Equipment, Optical Fiber, and Optical Fiber Cables (OFC), as well as the installation of sophisticated communication networks for Telecom Service Providers, Railways, and Defense.
The company has state-of-the-art Optical Fiber and Optical Fiber Cable production plants in Hyderabad, as well as Optical Fiber Cable manufacturing plants in Goa and in its subsidiary, HTL Limited, as well as FRP and ARP Rod manufacturing plants at its subsidiary, Hosur.
The Company’s in-house Centre for Excellence in Research in Gurgaon and Bengaluru, along with invested R&D Houses and other partners in India and overseas, develops a futuristic range of technological goods and services. Wi-Fi Systems, Unlicensed Band Radios, Switches, Electronic Fuses, Electro-Optic Devices, and Video Management Systems are among the newly produced items through R&D. Software Defined Radios, Routers, PON, 5G Transport and Radio products, Wi-Fi 6 access points, Home Mesh Router, Point-to-Multipoint Radios, and Ground Surveillance Radars are among the items in development.
Company’s History
Himachal Futuristic Communications Ltd. (HFCL) is a multifaceted provider of telecom infrastructure, actively involved in developing telecom infrastructure, system integration, and producing and distributing high-end telecom equipment and optical fibre cable (OFC). Their production facilities are situated in New Delhi, Solan in Himachal Pradesh, and Salcete in Goa. HTL Limited, Polixel Security Systems Private Limited, Moneta Finance Private Limited, and HFCL Advance Systems Private Limited were the Company’s four subsidiaries as of March 31, 2019, together with DragonWave, a joint venture. The Company and DragonWave Inc. Canada, currently known as DragonWave – X Canada Inc., a division of Transform – X Inc., have a joint venture company called HFCL India Private Limited.
On May 11th, 1987, Himachal Futuristic Communications Ltd. was established. The company first produced transmission equipment but soon added access equipment, optical fibre cable accessories, and terminal equipment to its line of products. The company is prepared to satisfy the demand for new generation access networks in the future. Deepak Malhotra, Mahendra Nahata, and Vinay Maloo were the company’s promoters, and the business was incorporated in the state of Himachal Pradesh. The company signed a Memorandum of Understanding with Philips Kommunikation Industries AG of Germany to produce the Digital Subscriber Carrier System and entered a technical collaboration agreement with Seiscor Technologies Inc. of the USA for the production of 1+1 and 1+7 Analog Subscriber Carrier Systems. The organisation launched two new companies in 1991, Himachal Telematics Ltd. at Solan to produce fax machines and digital microwave radio transmission technology and Microwave Communication Ltd. to build radio paging networks in some of the nation’s major cities. The company bought Coubndge Construction (Delhi) Ltd. and Kaldev Trader & Investment Ltd., which was later renamed HFCL-Trade-Invest Ltd., during the 1993–1994 fiscal year. Additionally, they entered into agreements with telecom behemoths like Wireless Telecom Ltd of the USA to implement V-sat services, Dalcons Corporation of Korea for managing credit card information services, and Kong Song Communication & Electronics Co Ltd of Korea to produce radio pagers and satellite video receivers. Himachal Telematics Ltd. amalgamated with the company in 1995–1996. The company won a contract in 1997 to build an information superhighway for Essar Communications Ltd’s basic telephone project in the Punjab circle. The company’s Goa optical fibre cable plant started operating commercially in 1996–1997. The company joined the information technology sector in 1998 by providing software to the telecom sector. For the provision of STM-1 optical line terminal equipment and an advance purchase order for STM-16 systems, the company received Rs. 22 crores during the 1998–1999 fiscal year. The company entered the software export market in 1999 and built a cutting-edge facility in Delhi. Reliance WorldTel awarded them a contract to build Tamil Nadu’s Internet backbone. Consolidated Futuristic Solutions Ltd. and Excel Netcommerce Ltd., two joint ventures in the fields of software and B2B e-commerce, were established by the business in 1999–2000 as a result of a strategic alliance with the Kerry Packer Group of Australia.
HFCL Infotel Ltd and Consolidated Futuristic Solutions Ltd joined the company as subsidiaries in 2000–2001. In the 2001-02 fiscal year, the company bought 74% of the shares of HTL Ltd, the largest manufacturer of switching equipment in the country, for Rs 55 crore. HTL Ltd joined the company as a subsidiary on October 16, 2001. Additionally, the company sold some of its shares in Consolidated Futuristic Solutions Ltd. as a result, its subsidiary Consolidated Futuristic Solutions Ltd. ceased to exist as of December 6, 2001. The company and its fully owned subsidiary, HFCL Trade-Invest Ltd, merged on March 31, 2003, during the fiscal year 2002–2003.
The company and its fully owned subsidiary, HFCL Trade-Invest Ltd, merged on March 31, 2003, during the fiscal year 2002–2003. With effect from September 1, 2002, HFCL Infotel Ltd amalgamated with the Chennai-based Investment Trust of India Ltd to become HFCL Infotel Ltd. Additionally, due to their subsidiary relationship with HFCL Infotel Ltd, Rajam Finance and Investments (India) Ltd, which was rebranded as The Investment Trust of India Ltd, became a subsidiary of the company. With effect from September 30, 2003, The Investment Trust of India Ltd. was no longer a subsidiary of the Company. The company’s cable division entered the cable TV market in 2003–2004 and quickly established itself as a major player. As of March 31, 2019, The company has 10000000 outstanding warrants, which were also converted into an equivalent number of 10000000 equity shares. The company’s paid-up equity share capital is currently $128.44 billion, consisting of 1284377194 equity shares with a face value of one rupee each. As of May 15th, 2019, the Company has a 90% controlling stake in Raddef Private Limited, making it a subsidiary of the Company. In FY 2019, the Company provided corporate guarantees to Corning Finolex Optical Private Ltd. for the supply of material on behalf of HTL Ltd., a subsidiary of the Company, and Punjab National Bank for Working Capital on behalf of Exicom Tele-System Ltd. Additionally, Yes Bank Ltd. on behalf of HTL Ltd. a subsidiary of the company for various credit facilities sanctioned to HTL Ltd. and Owens Corning India Private Ltd. on behalf of HTL Ltd. a subsidiary of the company for the supply of material. At its meeting on May 15, 2019, the Board of Directors recommended changing the company’s name from Himachal Futuristic Communications Limited to HFCL Limited. The company obtained orders totalling Rs 620 crore for the provision of OFC from its clients Larsen & Toubro Limited (Rs 148 crore), ITI led consortium (Rs 355 crore), and Tata Project Ltd. during the course of the year 2019. (Rs 117 crore). The Chennai Plant’s output capacity grew from 3.5 million to 7 million km in 2019 to make an aggregate capacity of 15 million km. The Chennai Plant’s capacity increased to 10.5 million km for the current fiscal year, bringing the combined OFC capacity to 18.5 million km. The Chennai Plant created its OFC Accessories Division to provide greater value to its own telecom turnkey vertical and other customers by offering all passive products. The division has since won numerous product approvals from both government and non-government customers. For these new products, the subsidiary company has received orders worth Rs 90.82 crore. In the fiscal year 2018–19, the company began a greenfield project in Hyderabad with a 6.4 million km capacity for the production of optical fibre. Additionally, it created, marketed, and sold its goods to more than 50 nations globally. The company has received a Purchase Order worth approximately Rs935 crore from BSNL for DWDM equipment to be installed across India for the Defense Forces under the Network for Spectrum Program in 2019. This is compared to an Advance Purchase Order worth approximately Rs1245 crore (including AMC of approximately Rs298 crore) (NFS). The Company received Purchase Orders from Bharat Broadband Network Limited for the construction of an optical fibre cable GPON network and radio network in the State of Punjab as part of the Bharat Net Phase-II project of the Indian government during the current financial year 2018–19, totalling Rs. 305 crore and Rs. 278 crores. The company had two associates and nine subsidiaries as of March 31, 2022.
In accordance with the BharatNet Project, the company finished installing optical fibre cables in Jharkhand in 2022. A total of 7765 kilometres of cable network were installed to link 1789 gramme panchayats via the GPON network. It began shipping Wi-Fi 6 items from the newer generation. In order to serve a wider consumer base, it expanded the UBR product range with more versions.
Top Shareholder
Below is a list of the top shareholders of HFCL Ltd as of June 2022.
| Shareholder | No of Shares | Shares(%) |
| MN Ventures Private Limited | 29,33,65,000 | 21.29 |
| NextWave Communication Private Limited | 21,98,65,000 | 15.96 |
| Fitcore Tech-Solutions Pvt. Ltd | 2,24,00,000 | 1.63 |
| Quant Capital Trustee Ltd | 2,45,26,772 | 1.78 |
| Reliance Venture Limited | 2,00,72,727 | 1.46 |
| Reliance Strategic Business Ventures Ltd | 4,85,32,764 | 3.52 |
| MKJ Enterprises Limited | 3,13,81,920 | 2.28 |
| Foreign Portfolio Investors | 9,38,39,369 | 6.81 |
Top Management
Below is a list of top management HFCL Ltd as of June 2022
| Name | Designation |
| Mr. Mahendra Nahata | Managing Director |
| Mr. SK Gard | Executive Director |
| Mr. V R Jain | Chief Financial Officer |
| Mr. Harsh Pagay | Executive President – Optical Fiber & Optical Fiber Cable |
| Mr. Jitendra Singh Chaudhary | Executive President – Communications |
| Mr. GS Naidu | COO, HTL Limited (a subsidiary of HFCL Ltd) |
| Mr Jayanta Dey | Executive President – 5G |
| Dr. Peter Weimann | Chief Technology Officer |
| Mr. Devender Kumar | Executive President – Project Delivery |
| Col B B Singh | Executive President- Defence Products |
| Mr. Rajesh Jain | Executive President – EPC Projects |
| Mr. NL Garg | President – Supply Chain Management |
| Mr. Sanjay Jorapur | President – HR |
| Mr Sunil Pandey | Chief Information Officer |
| Mr. Manoj Baid | Sr. Vice President (Corporate) & Company Secretary |
| Mr. Jochen Arms | Vice President – International Sales, HFCL B.V. |
| Ms. Neelu Chandra | Vice President – Corporate Social Responsibility |
Highlights From HFCL Ltd’s Latest Quarterly Results – Q1 FY 23
HFCL has released first-quarter results for the period ending June 30, 2022.
- The company’s net profit for the period under review decreased by 40.34 per cent to Rs 48.05 crore compared to Rs 80.54 crore for the same quarter last year. Comparing Q1FY23 to Q1FY22, the company’s total revenue declined by 12.74 per cent, from Rs 1112.90 billion to Rs 971.08 billion.
- On a consolidated basis, the company’s net profit for the quarter under review decreased by 41.45% to Rs 53.10 crore, compared to Rs 90.69 crore for the same period in the prior year. Comparing Q1FY23 to Q1 FY22, the company’s total revenue declined by 11.65%, from Rs 1212.16 crore to Rs 1070.94 crore.
- The company reported a standalone revenue of INR 951 crores, EBIDTA of INR 106 crores, PBT of INR 63 crores, and PAT of INR 48 crores for the first quarter ending 30 June 2022.
- The net sales decreased by 14.17 per cent to Rs. 9512.10 million from Rs. Profit after Tax for the quarter ending June 2022 decreased by -40.34 per cent, from Rs. 805.40 million to Rs. The OP decreased by 1063.30 million dollars from $1,650.50 million in the quarter ending June 2022, on a quarter-to-quarter basis.
- The net sales decreased by -14.17%, from Rs. 11082.00 million to Rs. 9512.10 million. Profit after Tax for the three months ending June 2022 decreased by -40.34 per cent, from Rs. 805.40 million to Rs. On a quarterly basis, the OP decreased by 1063.30 million dollars from $1,650.50 million in the quarter that ended in June 2022.
Why Should you invest in HFCL Ltd?
Here are a few instruments that any investor’s research procedure must have.
- PE ratio: Price to earnings ratio, which reflects how much an investor is ready to pay for a share for every rupee of earnings. Generally speaking, shares with a low P/E ratio are undervalued (it depends on other factors too). The PE ratio for HFCL is 40.98, which is high and pricey relative to other stocks.
- The Return on Assets (ROA): Return on Assets assesses the efficiency with which a business can generate a return on its asset investment. In other words, ROA demonstrates how well a business converts the funds needed to purchase assets into net income or profits. ROA for HFCL is 5.21%, which is a negative indicator of future performance. (increasing values are always desired)
- Current Ratio: The current ratio assesses the ability of a corporation to pay its short-term liabilities with its short-term assets. It is desirable for a corporation to have a high current ratio so that it can withstand unanticipated business and economic fluctuations. 1.39 is HFCL’s Current ratio.
- Return on Equity (ROE): Return on Equity quantifies a company’s capacity to create profits from its shareholders’ investments. In other words, the return on equity ratio demonstrates how much profit each ordinary stockholder’s equity rupee creates. ROE of HFCL is 12.76 per cent. (higher is superior)
- The Debt-to-Equity ratio: It is a valuable indicator for evaluating a company’s financial structure and its performance. The debt-to-equity ratio of 0.43 for HFCL indicates that the firm has a small amount of debt relative to its equity.
- Inventory Turnover Ratio: Inventory turnover ratio is an activity ratio used to measure the liquidity of a company’s inventory. It quantifies the frequency with which a business has sold and replaced its inventory over a given time period. The management of HFCL’s Inventory and working capital is inefficient, as seen by the company’s Inventory turnover ratio of 14.19.
- Sales: HFCL has announced a gain in sales of 15.75 per cent, which is commensurate with its performance and rate of expansion.
- Operating Margin: This indicates the operational efficiency of the company. During the current fiscal year, HFCL’s operating margin is 11.41 per cent.
- Dividend Yield: Indicates how much dividend we will receive relative to the stock’s price. HFCL’s current-year dividend is Rs 0.15, and its yield is 0.24 per cent.
FAQ On HFCL Ltd
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What is HFCL Ltd’s share price, and what are the returns for HFCL Ltd’s shares?
HFCL Ltd’s share price is INR 74.60 as of 22nd September 2022. HFCL Ltd has provided a return of approximately 153.57% in the past five years as of 22nd September 2022.
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What are the 52-week highs and lows of HFCL Ltd?
As on 22nd September 2022:
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- 52-wk high Rs 101.35
- 52-wk low Rs 51.55
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What are the key metrics to analyse HFCL Ltd’s Share Price?
Key metrics to analyse any share price are: 52-week high, a 52-week low, 1-year return, 5-year return, etc.
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Who are the peers of HFCL Ltd?
Peers of HFCL Ltd include ITI Ltd, Tejas Networks Ltd, Sterlite Technologies Ltd etc.
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What is the market cap of HFCL Ltd?
The market cap of HFCL Ltd is INR 10.90 thousand crores as of 22nd September 2022.
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