HFCL shares trade 4% down on dismal earnings in Q2

HFCL's management stated hat the company witnessed softening in demand of optical fibre cables and telecom and networking products from the telcos, resulting into decline in product revenue in Q2.

Moneycontrol News

October 20, 2023 / 12:32 IST

HFCL has operations in manufacturing of high-end telecom equipment, optical fiber and optical fiber cables and offers communication network solutions for telcos, defence and railway sector.

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Shares of HFCL declined around 4 percent in early trade on October 20, a day after the company reported a dismal set of earnings for the July-September quarter.

The telecom equipment manufacturer posted a 15.2 percent decline in its net profit of Rs 69 crore in Q2, down from Rs 82 crore last fiscal. Topline went down 5.3 percent year-on-year to Rs 1,111.50 crore in the September quarter.

"During this quarter, the company witnessed softening in demand of optical fibre cables and telecom and networking products from telcos, resulting into decline in product revenue," Mahendra Nahata, managing director of HFCL, said in an exchange filing.

Labelling the weakness as a temporary decline, Nahata attributed it to an inventory built-up with major operators, resulting in an overall reduction in revenue in absolute terms both domestically and in the international markets.

At 12.16pm, shares of HFCL were trading 3 percent lower at Rs 70.80 on the National Stock Exchange. Volumes were also high as 68 lakh shares changed hands on the exchanges so far, higher than the 50 lakh shares in the previous session.