HFCL Limited's shares traded up over 3 percent to Rs 115 to scale a fresh 52-week high in afternoon trade on February 21 after the company announced a strategic expansion into Europe by establishing an optical fiber cable manufacturing facility in Poland.
"The establishment of the manufacturing facility in Poland will be facilitated through the incorporation of a new stepdown subsidiary in Poland under HFCL B.V., a wholly-owned subsidiary of the Company in the Netherlands," the company said in a regulatory filing.
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The development gains significance as this expansion will enable the company to gain a noticeable increase in purchases by existing and new customers. Furthermore, it will also bolster HFCL’s presence in Europe with a target to increase its export revenue share in its OFC vertical revenue from 30 percent to 70 percent within the next 4-5 years.
Per the company, Europe’s OFC market is projected to experience a compound annual growth rate (CAGR) of around 4.5 percent over the next five years with an expected demand of 90 million fkm (fiber kilometres) per annum by 2028.
The proposed manufacturing facility in Poland will cost Rs 144 crore and shall begin with an initial capacity of 3.25 million fkm per year, scalable up to 7 million fkm.
"With Europe expected to remain a key market for optical fiber cable led
communication, our foray into Poland not only ensure unfettered access to this growing European market but also helps improve the agility and responsiveness in catering to increasing optical fiber cable demands of our customers", Mahendra Nahata, managing director of the company said.
At 2:45, the stock was training at Rs 112, up over a percent from the previous close on the NSE. Since the start of the year, the share price has gained over 31 percent.
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