HFCL - CMP 27.80 - Can it be a Wealth Creator???? Detailed Study

HFCL

HFCL Limited (formerly known as Himachal Futuristic Communications Limited) are a leading Technology Enterprise connecting the world with the fully integrated communication network solutions and specialized services.

Rich legacy of over three decades in enabling telecom revolution in India

They manufacture Optical Fiber, Optical Fiber Cables (OFC), Passive Interconnect Solutions and high-end Transmission and Access Equipment. They are technologically advanced offerings span the entire value chain, from manufacturing hi-tech communication network products to providing specialized services, which get deployed across Telecom, Defense, Railways, Utilities and Security & Surveillance Networks, both in the Private and Government Sector.

Five state-of-the-art manufacturing facilities

Enviable global clientele from across governments and private sectors

They are Accelerating on investments in revving the innovation engine – proprietary and collaborative Focus on hi-tech products such as Wi-Fi Network Products, High Capacity Radio Relay, Microwave Radios and Cloud-Based Management Platform, Switches, Routers, Intelligent Antenna Systems, Software Defined Radios, Ground Surveillance Radars, Electro-Optic Devices and Electronic Fuses

Their recently new launched is globally benchmarked – A Next Generation WiFi Technology products and solutions. It is totally designed, developed and manufactured in India with fully PR ownership residing with the Company WITH Major Global Certifications in place.

MANUFACTURING FACILITIES

   

• Optical Fiber Manufacturing Capacity: Optical fiber -6.4m fkm
• FTTH Cable Manufacturing - 3.6L cable km/annum

•     Optical Fiber Manufacturing Capacity: 8m fkm

• Optical Fiber Manufacturing Capacity: Optical fiber -10.5m fkm
• FTTH Cable Manufacturing -:2.4L cable km/annum

• FRP Rods, IGFR, ARP Manufacturing Hosur,
•  Capacity: FRP Thermal -UV 7,66,800 kms
•  IGFR -22.50 MT
• ARP 1,80,000 kms

•  Telecom Equipment Manufacturing

PRODUCTS          

  

IO NETWORK TECHNOLOGY - VIDEO LINK - SOURCE YOUTUBE

CUSTOMERS

                                                    

SUBSIDIARIES & JOINT VENTURES 

 

MANAGEMENT INTERVIEW SOURCE - YOUTUBE

BUSINESS UPDATE

• • Total order book stand at 7,313 Crores and in addition to this company has recently won order for 220+crores from UP metro.
  • Commenced production of optical fiber cables for fiber-to-home (FTTH) applications from Hyderabad facility – this should have positive effect in the topline in q4 numbers further expansion on the way
  • Launched Wi-FiI O system and delivered 1lakh units’ shipment of Wi-Fiproducts with in first full year of production commencement
  • HFCL said it will be investing nearly Rs 125 crore for R&D activities. HFCL has two centres of excellence at Gurgaon and Bangalore to spearhead in-house R&D activities
  • IO Networks by HFCL – a Wi-Fi NOW Partner – launched a brand new suite of Wi-Fi 6-capable APs powered by Qualcomm’s Networking Pro Series chipset platform. IO Networks says the new Wi-Fi 6 APs are capable of delivering twice the connectivity capacity and 75% lower latency compared to the company’s existing Wi-Fi 5 portfolio of APs.
  • IO Networks by HFCL says their Wi-Fi 6 solution offers ‘seamless integration with 5G core networks’ for ‘smooth data offload’ capabilities. Earlier this year IO Networks by HFCL reached the milestone of 100,000 APs and unlicensed microwave radios shipped – a remarkable achievement after only one year of operations
  • HFCL Limited and the US-based chipmaker Qualcomm Technologies have come together to bring out locally designed and developed Wi-Fi 6 products with the former aiming to achieve Rs 450 crore of annual revenue in the next three years with its Make in India for the world strategy in line with the Centre's ambitious Atmanirbhar Bharat (self-reliant India) campaign.
  • HFCL Limited partnered with VVDN Technologies and Delhi-based core solution provider i2e1 to provide public WiFi services under the PM-Wani initiative in Baslambi village of Haryana.
    The model village leverages HFCL IO’s PM-Wani compliant WiFi Access Points integrated with core solutions by i2e1, an IIT-Delhi-based startup
  .

FINANCIALS 

COMMENTS:

• Company has been  consistent performer with revenue and profit       CAGR over last 7 years of 27% and 23% 

• Debt- Equity stood at 0.43 and ROCE Stood at 21.50% which are considered to be very good.

• The results can’t be compared due to covid, however the company has significantly bounced back with good set of numbers in q3 and q4 fy 21 is expected to be as good as q3 

• Trade receivable seems to be major area of the concern where company needs to work a lot on receivables.

• Increase in finance cost is another area where the company needs to work

• In-spite of increase in non-cash item depreciation by 100% the company has performed better 

• There were serious corporate governance issue in the past and also promoters were not investment friendly.

 I HAVE SHARED MY RESEARCH JUST FOR KNOWLEDGE SHARING PURPOSE ONLY WITH NO TARGETS , INVESTMENT IN MARKETS IS SUBJECT TO RISK DO YOUR OWN RISK ASSESSMENT.