Result-Analysis-Elite-Wealth.

Result-Analysis

Result Analysis: HFCL Ltd. Result Update Q2FY22
Particulars (In Rs. Cr.) Q2FY22 Q1FY21 Q2FY21 QoQ % YoY%
Revenue from Operations 1122 1207 1054 -7.03% 6.43%
Other Income 4 5 12 -22.64% -65.83%
Total Income 1126 1212 1066 -7.09% 5.62%
Total Expense 953 1021 929 -6.63% 2.59%
EBITDA 173 192 138 -9.55% 26.04%
EBITDA Margin (%) 15.44% 15.88% 13.04% 44.00 237.00
Depreciation 18 18 17 1.69% 9.04%
Finance Cost 40 50 43 -19.19% -5.88%
Share of Net Profit/(Loss) Of JV 0.2 -0.2 0.0
Exceptional Items 0.0 0.0 2.9
PBT 115 124 76 -7.01% 52.85%
Tax 29 33 22 -12.28% 31.98%
PAT 86 91 53 -5.07% 61.54%
PAT Margin (%) 7.67% 7.52% 5.06% 15 261
EPS (in Rs. ) 0.64 0.68 0.39 -5.88% 64.10%

Result Highlight: 

  • HFCL Consolidated Revenue declined 7.03% QoQ and rose 6.43% YoY to Rs 1122 crore due to chip shortage & many turnkey projects were not operational due to monsoon season

  • Operating Profit Margin contracted to 15.44% from 15.88% last quarter.

  • Net profit fell 5.07% to Rs 86 crore for the September quarter compared with Rs 91 crore in the last quarter.

  • HFCL have order book of Rs 5, 8222 Crore. Last week company has received an order from RailTel Corporation of india of Rs 287.96 Crore.

  • HFCL have healthy Free Cash flows & gradually improving.

  • Finance cost is reduced as Debt is reduced. 

Management commentary: 

  • Mahendra Nahata, Promoter and Managing Director, said: We are more focused to launching new products in new geography and want to increase the exports. With the roll out of 5G technology there will be massive demand in optic fiber & 5G equipment and company is well positioned to grab the opportunity. Company’s Bangalore R & D Center is focused to develop 5G innovative product.

 Conference Call Highlights 

  • Company has seen a margin dip in revenue which is mainly due to chip shortage & many turnkey projects were not operational due to monsoon season.

  • Out of total revenue, 21% comes from JIO.

  • During the Quarter, Revenue from service is decreased since company is more focused on product revenue as margins are good in product as compared to services.

  • Company have target of Rs 210 Crore capex (Excluding R & D Capex) during the year which will be mainly for optic fiber & defense equipment.

  • It will take another 8-9 months to complete defense product facility. And revenue from defense product will be seen in next FY.

  • Company have done export of Rs 107 Crore till date & expected to export Rs 300 Crore for FY 2022 Vs Rs 201 Crore export done in FY 21. And expected to export Rs 500 Cr in next year. Company majorly exports in Europe & Middle East.

  • Company is facing chip shortage problem which can’t be resolved in 3-6 months. Chips are used in WIFI, Routers & Switches.

  • Company have 2 R& D Centers. One in Gurugram & Other one in Bangalore (more focused in 5G & Wifi Products). Company do R&D through different route such as In house R&D Center, Contract R&D or buying equity stake in R&D Company.

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