HFCL trades volatile after bagging order worth Rs 412.90 crore

Shares of HFCL gained from the previous close of Rs 72.85 to Rs 74.70 after the news break but slipped to Rs 69.85 in a matter of time.

In today’s morning trading session HFCL rose 2.53% to Rs 74.70 owing to this news that the company secured purchase orders aggregating to Rs 412.90 crore from one of the leading Private Telecom Operators of the Country for the supply of Optical Fibre Cables (OFC). The order will be executed by March 2022.

Company and its client base

HFCL is a midcap diverse telecom infrastructure enabler with active interest spanning telecom infrastructure development, system integration, and manufacture and supply of high-end telecom equipment, Optical Fiber and Optic Fiber Cable (OFC).

Company's client base includes Jio, Tata, Airtel, Vodafone, Nokia, L&T, Orange, BSNL, BBNL, TCIL, BPCL, IOL, Railtel, HPCL, PGC, GAIL, Saudi Railways and others.

As of September 2021, the company had an order book of Rs 5,822 crore out of which Rs 4,500 crore worth of orders are where BSNL is the implementing agency. The order book broadly consists of defence projects (57%), optical fibre cable (14%), orders from RJIL (14%) BharatNet (7%) and others (8%).

Financials

HFCL consolidated revenue for the quarter Q2FY22 came in at Rs 1,126 crore as against Rs 1,068 crore in the corresponding quarter last year, registering a 5.62% YoY increase.

The EBITDA for the quarter grew by 25.99% YoY to Rs 173.33 crore as against Rs 137.5 crore in the corresponding quarter last year, with a corresponding margin expansion of 240 bps. EBITDA margin for the quarter stood at 15.44%.

The PAT for the quarter came in at Rs 86.1 crore as against Rs 53.3 crore in the corresponding quarter last year, a YoY increase of 61.18%.

Market opportunity: Rs 4-5 lakh crore in 5G alone; Rs 5000 crore in Defence, Rs 85000 crore in Railways in the next 4-5 years. There is an immense demand for fibre optic cables, telecom and networking products across the world followed by expansion of 4G and evolution of 5G network.

At 2.15 PM, HFCL was trading at Rs 69.70, 4.30% down for the day.