Multibagger: HFCL stock zooms 26% in less than a month, gained 300% in last 3 years

The stellar performance has propelled the stock to a gain of 248% over the past two years and an impressive 301% over the last three years. Over the last decade, the stock has delivered a whopping return of 894%.

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HFCL is a leading technology company specialising in creating digital networks for telcos, enterprises, and governments. It has developed capabilities to provide premium-quality optical fiber and optical fiber cables, state-of-the-art telecom products, including 5G Radio Access Network (RAN) products, 5G transport products, WiFi systems (WiFi 6, WiFi 7), unlicensed band radios, switches, routers, and software-defined radios.

According to analysts, Indian companies engaged in the optical fiber business are strategically positioned, benefiting from the nation’s extensive digitization initiatives. In August, India’s Commerce Ministry imposed anti-dumping duties on the import of optical fibers and related products, specifically targeting goods from China as well as other Asian countries like Indonesia and Korea.

As India emerges as one of the fastest nations to roll out the 5G network, 5G technology has already become a global phenomenon. As 5G continues its global proliferation, ensuring foolproof and efficient last-mile connectivity becomes paramount for the network’s overall performance and efficiency. To fully unleash 5G’s potential, it is crucial to provide robust last-mile solution that cater to the diverse needs of telecom service providers and end-users.

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Recognising this imperative need, HFCL has introduced indigenously developed 5G Fixed Wireless Access (FWA) products and has become the first Indian company to present its indigenously designed and developed 5G Fixed Wireless Access (FWA) Customer Premise Equipment (CPE) solution, as per the company’s exchange filing.

In October, the company launched the country’s first indigenously designed and developed 2 Gbps Unlicensed Band Radio (UBR) for enterprises and telcos.

This year, the company has secured several significant orders for the supply of optical fiber cables to domestic telecom service providers. On December 2, the company, along with its material subsidiary, HTL Limited, received purchase orders totaling ₹67 crore for the supply of optical fibre cables to one of the domestic telecom service providers in the country.

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Moreover, in August, the company received purchase orders aggregating to ₹137.63 crore from Reliance Retail Limited. This order is for the supply of optical fiber cables. In May, it received a ₹42.71 crore order from Reliance Jio Infocomm Limited for the supply of indigenously designed, developed, and manufactured 700 MBPs and 1GPBS point-to-point unlicensed band radios (UBRs).

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As of the end of Q2FY24, the company’s order book stands strong at ₹7,078 crore, showcasing significant growth from ₹5,280 crore in Q2FY23. For the September-ending quarter, the company reported a 5.28% YoY decline in consolidated revenue to ₹1,111 crore.

The consolidated net profit for Q2FY24 was ₹70 crore, reflecting a 16.66% decrease compared to the net profit of ₹84 crore in Q2FY23.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 26 Dec 2023, 10:07 AM IST