Moneycontrol PRO

HFCL slumps 7% after a poor Q1 show, but management confident of future growth

The company believes this poor performance may just be a blip as HFCL is ready to ride “a multi-year upcycle for telecom and network implementation” and sees huge opportunity in markets like India, Europe and US

July 25, 2022 / 10:51 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Shares of HFCL, which makes telecom equipment and optical fiber cables, slumped over 7 percent after the company reported disappointing earnings for the quarter ended June 30, 2022.

At 10.10 am, the stock was down over 7 percent to Rs 63 on BSE. It has fallen 21 percent this year so far in line with wider market but has seen some buying in recent one month period due to some big orders.

HFCL said its profits tanked 42 percent year-on-year (YoY) while revenue fell 13 percent for the quarter ended June 30, 2022. Ebitda margins were also lower by 345 basis points at 12.37 percent. All numbers contracted sequentially as well.

“Revenue and consequently profitability during the quarter got impacted due to spill over of service billing followed by non-availability of required infrastructure from the customer end and also continued shortage of semiconductors,” said Mahendra Nahata, Managing Director, HFCL.

HFCL said its order book stood at more than Rs 5,300 crore at the end of June quarter. Its exports increased by 167 percent YoY. It also highlighted that gross margin increased to 25.31 percent in Q1FY23 compared to 24.09 percent in Q4FY22.

Close

The company believes this poor performance may just be a blip as HFCL is ready to ride “a multi-year upcycle for telecom and network implementation” and sees huge opportunity in markets like India, Europe and US.

“FY23 is a year of transformation for HFCL as we will focus on creating capabilities and expanding capacities for sustainable profitable growth and leverage on the upcoming opportunities in Telecom, 5G network implementation, Defence and Railways,” said Nahata.
Moneycontrol News
first published: Jul 25, 2022 10:51 am
Sections
ISO 27001 - BSI Assurance Mark