HFCL profit falls 23% in Q4

Telecom equipment manufacturer HFCL on Monday reported a 23% quarter-on-quarter (QoQ) fall in net profit to Rs 79 crore in the January-March period. The company’s revenue from operations rose 32% QoQ to Rs 1,433 crore. The reason for the fall in net profit can be attributed to a significant increase in expenses, especially related to the cost of material consumed and purchase of stock, according to the company’s financial statement.

A fall in revenue from telecom product segment also led to weak net profit for the company during the quarter. On a year-on-year basis, the net profit rose 15. 5%, whereas revenue rose 21%.

The company manufactures fibre optic cables and telecom equipment such as ethernet switches, point-to-point unlicensed band radios and provide cloud-based network management systems. Also ReadIRM India Affiliate partners with Reliance Jio to drive Enterprise Risk Management in telecom sector “Our company has also been able to withstand the economic challenges and has shown sturdy performance in FY 22-23. The company remains focused on its strategy of increasing revenue from margin accretive products, expansion of capacities coupled with high-level backward integration, huge impetus on R&D, increasing customer base and geographical expansion,” said Mahendra Nahata, managing director of the company.

Also ReadProposed reforms to boost digital economy: BIF “The company is expanding its fibre optic capacity from existing 10 million fkm (fibre km) to 25 million fkm and fibre optic cable capacity from 25 million fkm to 35 million fkm by FY25. The Company is simultaneously developing various 5G radio access network products, transport products and broadband wireless products, which are expected to be launched during the current financial year,” Nahata added. Owing to an increase in operating expenses, the company’s EBITDA margins contracted by six percentage points or 606 basis points sequentially to 11.

74% in the January-March quarter. As on March-end, the company’s order book stood at over Rs 7,000 crore. The company has been witnessing strong demand for exports from the UK, France, Germany, Australia, among other countries.

The company is also a beneficiary of the PLI scheme for telecom equipment and committed an investment of Rs 425 crore over a period of four years for manufacturing of 5G radio equipment, routers, switches, WiFi products and backhaul radios.    “Committed an investment of ₹425 crore in the PLI scheme and will avail an incentive up to Rs 652. 79 crores over a period of four-five years,” the company said.

In FY23, the company’s revenue rose marginally to Rs 4,743 crore, whereas net profit fell 2. 5% to Rs 317 crore. “Our continued focus on creating and expanding capacities and tapping new geographies has not only led to an increase in the share of product revenue to 56% in FY23 as compared with 43% in FY22 but also resulted in increased share of revenue from private customers to 83% in FY23 from 68% in FY22,” Nahata added.

.