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HFCL Ltd. Stock Analysis

Small Cap
Evaluated by 1532 users | BSE: 500183 | NSE: HFCL |
Telecommunication - Equipment
Himachal Futuristic Communications (HFCL) incorporated in 1987, is engaged in the business of manufacturing telecom products and provides turnkey solutions and basic telephony and ISP services. The company manufactures access equipment, optical fibre cables, accessories and terminal...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
HFCL Ltd. has not performed well majority of the past ten years indicating its past ten year financial track record is not good
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed -10.9%2.78%7.34%16.38%17.09%19.54%11.1%12.36%13.04%13.02%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 1732616052,0192,5512,5702,0163,0664,3663,547
Y-o-Y Gr. Rt.-50.9%132.2%233.5%26.4%0.7%-21.5%52.1%42.4%-18.8%
Adjusted EPS (Rs.) -2.880.040.431.211.431.8311.241.431.66
Y-o-Y Gr. Rt.-NA975%181.4%18.2%28%-45.4%24%15.3%16.1%
Book Value per Share (Rs.) 6.474.655.096.127.527.418.429.6711.2312.72
Adjusted Net Profit -2854.653.5150177227123154182214
Net Op. Cash Flow (Rs. Cr.) 44-3.284.3101119-79.9138183-16.4208
Debt to Cash Flow from Ops 17.38-104.553.432.822.43-6.573.592.32-33.692.93
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
HFCL Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 39.9%6.8%20.7%-18.8%
Adjusted EPS NA3%18.4%16.1%
Book Value per Share 7.811.114.713.3
Share Price 4.1% -0.2% -12.7% -8.5%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) -33.390.77.8219.4119.123.5512.5913.6113.7213.83
Operating Profit Margin (%) -228.7612.1713.429.478.9412.58.978.227.7411.49
Net Profit Margin (%) -165.131.758.837.456.938.856.125.014.186.02
Debt to Equity 0.950.50.410.340.290.570.470.350.390.37
Working Capital Days 2,545775376155162201329236200289
Cash Conversion Cycle 1,3554371784229591551016787
Entity Percentage Holding
Promoters 38.64%
Institutions 5.25%
Non-Institutions 56.11%
Pledged *50.8950.8960.9269.8568.7868.7868.7868.7867.8555.48
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of HFCL and arrived at the following conclusion:

Past 10 year's financial track record indicates that HFCL is a below average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of HFCL's performance infers:

HFCL earnings have grown by 3%, whereas share price has depreciated -0.2% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of HFCL share prices over the last 10 years. Here is what we found out:

HFCL share price has depreciated 3.6% annually over the past ten years.

Himachal Futuristic Communications (HFCL) incorporated in 1987, is engaged in the business of manufacturing telecom products and provides turnkey solutions and basic telephony and ISP services. The company manufactures access equipment, optical fibre cables, accessories and terminal equipment. HFCL’s manufacturing units are located at Solan, Himachal Pradesh, Goaand New Delhi. The Solan facility produces high quality wire and wireless technologies

Himachal Futuristic Communications (HFCL) incorporated in 1987, is engaged in the business of manufacturing telecom products and provides turnkey solutions and basic telephony and ISP services. The company manufactures access equipment, optical fibre cables, accessories and terminal equipment. HFCL’s manufacturing units are located at Solan, Himachal Pradesh, Goaand New Delhi. The Solan facility produces high quality wire and wireless technologies and the Goa plant manufactures highly sophisticated fibre optic cable. Its Goa plant is committed to provide total customer satisfaction for quality services at competitive prices in the national and international markets for the entire range of services such as radio networks, optical transmission networks, access networks and outside plant management systems.

It also carries out in house R&D activities in order to explore new technologies, design radio, optical transmission equipment and access equipment and develop software solutions that include a high level of network management systems. This division is supported by an engineering department in area of IT infrastructure, CAD, Packaging, Procurement, Product Engineering, Prototype and Pilot Production.

In order to share technological know-how, the company has partnered with various equipment manufacturers located in UK, Italy, US, China, Korea, etc. The company has exported its equipments and has undertaken various turnkey projects in countries like Kuwait, Iran, Sri Lanka, Bangladesh, Iraq, etc. In 2005, the company entered into an agreement with iCard Technologies to form a JV under the name Indiacard Technology. This JV company was founded with an aim to foray in SIM card/Smart card technology business in India and for export to global markets.

HFCL'a client-base includes major companies such as BSNL, MTNL, TTL, Reliance, Bharti, PGCIL, GAIL and VSNL.

HFCL has associates companies namely HFCL Infotel that emerged as the first basic service provider in Punjab and HFCL Satellite Communications that offers customized DSNG vans to channels like Aaj Tak; and  Microwave Communications offering basic telephoney and internet services.

In  2010 it entered into Joint Venture Agreement between with Dragonwave INC and in 2011 started Adoption of Rework of CDR Package.

Business divisions

Wireless Division- This division manufactures mobile communication equipments based on CDMA and CorDECT technologies and a spectrum of digital microwave communication equipments.

The product range under this segment include:

  • Radio Terminals ranging in 2 GHz, 15 GHz, 18GHz and 23 GHz PDH (4x2 to 16x2 MB)
  • CorDECT- WLL systems
  • CDMA- WLL systems

Wire division- Under this, the company manufactures analogue subscriber carrier systems (ASCS) and primary digital multiplexer. It also operates in house assembly lines include coils, cable assemblies & manual assembly lines. The division has collaborated with international telecom giants like Marconi, UTStarcom, and Huawei to bring in latest technologies in India at affordable prices

The product range under this segment is:

  • SDH Transmission - STM-1, 4 and 16
  • SDH-Access-DLC
  • DWDM -32 Ch
  • Digital Cross Connect (DXC)

Cable division- HFCL manufactures range of cables such as :-

  • Loose tube cable upto 96 fibres
  • Uni tube cable (max. fibre count 12)
  • ADSS Aerial cable
  • Metallic self supporting aerial cable
  • Corrugated steel tape armoured cable
  • Wire armoured cable
  • Simplex / Duplex cable
  • Cord cable
  • Terminated quick deployable cable with hermaphroditic connectors
  • Terminated cord cables / Pigtails with user specified connectors

HFCL also supplies complete range of Power Management Solutions including power plants specially designed and engineered to meet customer specific needs that meet stringent standards. It supplies energy efficient, cost effective Passive Infrastructure solutions and is addressing the much needed green energy solutions.

Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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