Himachal Futuristic Communications Ltd (HFCL)

HFCL

About the Company:

Established in 1987, Himachal Futuristic Communications Limited (HFCL) is a diverse telecom infrastructure enabler with active interest spanning telecom infrastructure development, system integration, and manufacture and supply of high-end telecom equipment and Optic Fibre Cable (OFC).

Company has technology tie-ups for manufacturing of next generation fibre access network equipment (FTTx System) and broadband wireless access solutions (Wifi Systems).

Company has a OFC manufacturing facility at Goa whose capacity was increased last year and is running at full capacity,Company also went on to add and commission additional OFC capacity at the Chennai facility of its subsidiary company, HTL Ltd.

Company has been awarded seven Licences by the government for Manufacturing Defence Equipment including Radars, Communication Systems, Weapons,Night Vision Systems, Fuses etc

Company telecom product and turnkey solutions segments shall both continue to drive Company’s growth in view of the Government’s thrust on transforming the country into a ‘Digital India’ on the back of a robust OFC network that addresses fast multiplying data transmission requirements.

With completion of expansion projects, the Company is now addressing Fiber to the home (FTTH) business segment which has significant potential over the coming years. Company has also established itself as a global supplier of OFC products with exports to over 25 countries.

Schemes like ‘BharatNet’ and ‘Rural Wireline Broadband Scheme’ shall fuel the demand for OFC and network installations.Company had made good progress across all the business segments.Company’s Turnkey and Optic Fibre Cable (OFC) businesses both have contributed to the Growth and company is also making encouraging progress in the newly added business dimensions of Railways and Defence.

There are many projects which are currently being promoted by the government of india such as Railway Modernization, Defence Self-sufficiency, Digital Security, Make in India, Smart Cities etc.Company is one of the biggest beneficiary of all these projects.

In Railways segment, Company is also participating in various tenders for Design, Supply, and Erection of turnkey Telecom Networks in Railways for Freight Corridors and Metro Rail Projects.

Company is on a continous expansion of its OFC manufacturing capacity which is almost quadrupled in last three years from 30,000 CKM to 1,10,400 CKM.

In the last few years company has developed many new products to address the increasing demand of special cables for FTTx application. Apart from FTTx, HFCL has also developed many other products which are extensively used in overseas markets.

Subsidiaries of the Company:

  • HFCL Advance Systems
  • Moneta Finance Ltd
  • HTL Limited
  • DragonWave HFCL Ltd.
  • Microwave Communications
  • Polixel Security Systems.

 

Also watch this Video : (Detailed Analysis Inside this Video Part 1)

 

Highlights of the Company:

  • Secured seven licenses for manufacturing defence equipment.
  • Bagged an Advance Purchase Order worth ` 1245 Crore from BSNL, taking current order book to ` 3300 Crore approx.
  • Commissioned a dedicated OFC manufacturing facility at Chennai (under HTL Ltd., a subsidiary company).
  • Bagged a breakthrough order from Switzerland’s Trans Adriatic Pipeline AG for OFC supply.
  • Recorded impressive growth of over 100% in export of OFC.
  • Turnkey business has been successful in bagging an Advance Purchase Order (APO) of about ₹1,245 Crore from BSNL for setting up of the prestigious countrywide Telecom Transmission Network.

 

Also watch this Video (Detailed Analysis Inside this Video Part 2):

 

Positives for the Company:

  • Schemes like Bharat Broadband,Rural Wireline Broadband Scheme & Reliance Jio expansion shall fuel the demand for OFC and network installations.
  • In Railways segment, we are participating in various tenders for Design, Supply, and Erection of turnkey Telecom Networks in Railways for Freight Corridors and Metro Rail Projects.
  • Polixel is in the process of bagging many Smart/Safe city projects.
  • Company is considering to expand their telecom product bouquet beyond GSM equipment with potential addition of WiFi Systems and Optical Broadband Access Equipment (FTTx).
  • Company is spreading its business spectrum by adding manufacturing of Defence Gears and turnkey installation of communication and signaling network for Railways.
  • Company is working at full capacity (100% utilization) to meet the growing demand.

 

Note: We had recommended the Stock 6 months back at Rs. 13 and now the stock price has touched Rs.30.

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Financials of the Company:

(in Crores) FY 12 FY 13 FY 14 FY 15 FY 16 FY 17
Revenue 261 605 2019 2551 2570 2400
Net Profit 11 55 147 190 119 123

 

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