HFCL is the top gainer on August 8, thanks to a recent partnership announcement

resr 5paisa Research Team 12th December 2022 - 08:58 pm
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HFCL has entered into a Collaboration Agreement with Qualcomm Technologies for designing and development of 5G millimetre wave FWA (Fixed Wireless Access) and CPE (Customer Premise Equipment) products.

Markets closed on a positive note on August 8. S&P BSE Sensex closed with a 0.8 % gain at the 58853 level. On the sectoral front, Utilities, Power, and Capital goods remain the top gainer with 2%, 1.92%, and 1.61% upside movement, respectively.

HFCL Ltd was one of the top-performing stocks today. It appreciated by 9.4% from the previous close of Rs 68.05 to close at Rs 74.45. The stock also managed to reach an intraday high of Rs 75.5.

The scrip is rallying on the back of news regarding the company partnering with Qualcomm Technologies for designing and development of 5G millimetre wave FWA (Fixed Wireless Access) and CPE (Customer Premise Equipment) products.

HFCL Ltd is a diversified telecom infrastructure provider which manufactures and supplies high-end telecom equipment, optical fibre, and optical fibre cable (OFC).

The company belongs to S&P BSE group ‘A’ and has a market capitalization of Rs 10257 crore. The stock is trading at a PE multiple of 36.5x.

About the segment-wise revenue breakdown of the company, 79% of the revenue comes from public telecommunications, 19% from defence communication, and the remaining 2% from railway communications.

Q1 FY23 result for the company was not in expected lines. The Q1FY23 revenue declined by 14.17% on a YOY basis from Rs 1108.2 crore to Rs 951.21 crore. On a YOY basis, the net profit also dropped drastically by 40.34% from Rs 80.54 crore to Rs 48.05 crore. Over the long term, the company has delivered strong revenue growth with 10-year growth at 34% CAGR. However, short-term revenue remains weak with 3-year growth at 0% CAGR.

As per the March period ending, the company has an ROE, ROCE, and dividend yield of 13.5%, 19.2%, and 0.2%, respectively.

About the shareholding pattern, 39.2% stake is owned by the promoters, FIIs and DIIs together hold 8.84% stake, and 51.96% is held by the non-institutional investors. Promoters have pledged 44.7% of their holding.

The stock has a 52-week high and low of Rs 101 and Rs 51.6, respectively.

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