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INVESTMENT INSIGHTS

Check Before You Invest : HFCL Ltd

BSE: 500183 NSE: HFCL ISIN: INE548A01028
  |   Sector:  Telecom   |   Industry:  Telecom-Infrastructure

Snapshot

Q.1 Which industry/sub-sector does HFCL Ltd belong to?
HFCL Ltd belongs to the Telecom sector, operating specifically within the Telecom-Infrastructure segment.
Q.2 Is HFCL Ltd a good quality company?
HFCL Ltd is a quality company, based on a 10 year financial track record.
Q.3 Is HFCL Ltd undervalued or overvalued?
HFCL Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.
Q.4 Is HFCL Ltd a good buy now?
HFCL Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of HFCL Ltd?
HFCL Ltd revenue growth is -6.9% for FY-2025 , which is below its 5 year CAGR of 1.4% , indicating slower growth.
Q.2 Gross Profit margin of HFCL Ltd?
HFCL Ltd Gross profit margin which is the profit after deduction of direct costs, is 8.6% for FY-2025 , which is below its 5 year median of 9.1% , indicating decreasing margins.
Q.3 Operating Profit Margin of HFCL Ltd?
HFCL Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 10.93% for FY-2025 , which is below its 5 year median of 11.41% indicating decreasing margins.
Q.4 Net Profit Margin of HFCL Ltd?
HFCL Ltd Net Profit Margin is 5.13% for FY-2025 , is below with its 5 year median of 5.79%, indicating decreasing margins.
Current Level Historic Median
Gross Profit Margin 8.6 9.1
Operating Profit Margin 10.93 11.41
Net Profit Margin 5.13 5.79
Q.5 Return on Asset of HFCL Ltd?
HFCL Ltd Return on Asset is 2.93(x), which is below its 5 year historical median of 5.21(x), indicating deteriorated asset utilization efficiency.
Q.6 Return on Equity (ROE) of HFCL Ltd?
HFCL Ltd Return on equity is 5.01% for FY-2025 , which is below its historical median of 9.13%, indicating the business is making worse use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of HFCL Ltd?
HFCL Ltd Return on capital employed is 7.93% for FY-2025 , which is below its estimated weighted average cost of capital(WACC) 13.5%, indicating value preservation.
Q.8 Cash conversion cycle of HFCL Ltd?
HFCL Ltd Cash conversion cycle is 153 , above its historical median of 107 , indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.57 0.88
ROE 5.01 9.13
ROCE 7.93 12.91
Cash Conversion Cycle 153 107
Q.9 Debt to Equity ratio of HFCL Ltd?
HFCL Ltd Debt-to-Equity ratio is 0.32 , which is lower with the industry average of 0.33 , indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of HFCL Ltd?
HFCL Ltd Debt to cash flow from operations is 2.92 , which is at a moderate level, indicating the business is able to service its debt comfortably.

Ownership & governance

Q.1 Promoter shareholding and pledge status of HFCL Ltd?
Promoters hold 28.29% of the HFCL Ltd, with 1.15% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of HFCL Ltd vs industry peers?
HFCL Ltd revenue CAGR is 1.36% , compared to the industry median CAGR of 0.00% , indicating faster growth and gaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 3,795.2 1,615.5
Gross Profit 326.4 89.4
Operating Profit 415 141.5
Net Profit 195 59
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.57 0.99
ROE 5.01 15.95
ROCE 7.93 16.65
Cash Conversion Cycle 152.96 86

Valuation & price assessment

Q.1 Stock return of HFCL Ltd over the last decade?
Over the last 9 years, the stock has delivered a CAGR of 16.5% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 16.5% 28.5% 10.4% 13.1%
Q.3 Valuation ratios of HFCL Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 4784.55 15.92 43.99
Price to Book 2.8 1.30 1.82
Price to Sales 3.42 0.72 2.56
EV to EBITDA 42.12 7.24 17.35

Check more companies

1. HFCL
2. Bondada Engineering
3. Pace Digitek
4. GTL Infrastructure
5. Vindhya Telelinks
6. STL Networks
7. Suyog Telematics
8. Sar Televenture
9. Kore Digital
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