Multibagger alert: An investment of Rs 1 lakh a year ago in this telecom stock would have turned to Rs 3.9 lakh today!

Multibagger alert: An investment of Rs 1 lakh a year ago in this telecom stock would have turned to Rs 3.9 lakh today!

by 5paisa Research Team Last Updated: Dec 13, 2022 - 01:31 am 45.8k Views
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The company’s share price went from Rs 18.45 on 27 November 2020 to Rs 72.8 on 26 November 2021, generating a return of 294.58% YoY for its shareholders!

HFCL Ltd, a domestic telecom company that manufactures optical fibre cables, optical transport, power electronics and broadband equipment has turned into a multibagger by delivering stellar returns of 294.5%!

The company specializes in the manufacturing of telecommunication equipment, optical fibre cables and intelligent power systems. Also, as a telecommunication solutions provider, the company has implemented several Greenfield projects, including the setting up of CDMA and GSM networks, satellite communications, wireless spectrum management and DWDM optical transmission network.

Additionally, in a joint venture with DragonWave, a Canadian enterprise, the company also supplies a full range of Point-to-Point Microwave Radio Links (IP radios up to 23Ghz). The company exports its products to more than 30 countries across Africa, Europe and Asia. Its marquee clients include Reliance Jio, Bharti Airtel, BSNL, L&T, TCIL, Mauritius Metro Rail, to name a few.

In Q2FY22, on a consolidated basis, HFCL’s topline grew by 6.42% YoY to Rs 1122.05 crore. The PBIDT (ex OI) during the quarter went up by 34.8% YoY to Rs 169.15 crore, while the corresponding margin expanded by 240 bps YoY to 15.44%. Similarly, the company’s bottom line rose by 60.9% YoY to Rs 85.79 crore, and the PAT margin expanded by 259 bps YoY to 7.65%.

At present, the company has various marquee network projects under implementation. Under the Public Telecommunication segment, HFCL is rolling out the backbone and backhaul Optical Fiber Cable and FTTH Network for Reliance Jio across Northern India. Apart from this, the company is also working on the implementation of multiple hybrid projects for the Bharat Net Phase-2 OFC network, setting up Rural mobile network, WiFi, IP and MW network. The cumulative order book for this segment stands at approximately Rs 1,757 crore. Similarly, the order book for its Defence Communication and Railway Communication orders stands at Rs 2,572 crore and Rs 514 crore respectively.

Last week, the company announced that along with its subsidiary, HTL Limited, it has received the Purchase Orders ("PO") aggregating to Rs 412.90 crore, from one of the leading Private Telecom Operators of the country for supply of Optical Fibre Cables (OFC).

At 2.46 pm today, the share price of HFCL Ltd was trading at Rs 70.35, which was a decline of 3.37% from the previous week’s closing price of Rs 72.8 on BSE.

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