investment thesis on HFCL

5 G spectrum allocation in india in july 2022 facilitate telcos rolling out 5 G services by FY23  5G will allow enterprises to embark on the Industry 4.0 journey, and it will help accelerate digital transformation across industries, India is the world’s 2nd largest telecom market with 2nd highest internet users. The launch of the 5G network will enable telecom operators to start providing a new generation of high bandwidth services to customers.Economic impact of 5G

estimated to reach USD 1 trillion by 2035. Growing domestic market – increasing Minutes of Use (MoU) and data usage – supported by growing income and youth population, Supportive government policies – like ‘Make in India’ and China +1 strategy – creating new opportunities in both global and domestic markets .Government focus on rural connectivity and implementation of BharatNet Phase II to lead to incremental demand of fibre optic cable.

Strengthening of telecom infrastructure with increased fibreised cell tower ratio, expected to double by 2025. 5 G- will be a game changer for indian economy.

HFCL is a leading innovation-led technology co. in area of Integrated next-gen communication products and solutions provider, Over the past three decades, HFCL has delivered innovative, customized and competitive products and latest solutions in the high technology telecommunications infrastructure sector. The Company specializes in manufacturing of telecommunication equipment, optical fiber cables and intelligent power systems. As a telecommunication solutions provider, the Company has implemented several projects, including the setting up of CDMA & GSM networks, satellite communications, wireless spectrum management and DWDM optical transmission network.

The Company has state-of-the-art Optical Fiber and Optical Fiber Cable manufacturing plants at at Solan(Himachal Pradesh),Goa and Hyderabad, and in its subsidiary i.e. HTL Limited at Chennai along with FRP and ARP Rod manufacturing plant in its subsidiary at Hosur. The Company’s in-house Centre for Excellence in Research located at Gurgaon & Bengaluru along with invested R&D Houses and other collaborators at different locations in India and abroad, innovate futuristic range of technology products and solutions. Some of the newly developed products through R&D are Wi-Fi Systems, Unlicensed Band Radios, Switches, Fuses, optic devices, and Video Management Systems. There is a suite of products under development, which include Software Defined Radios, Routers, PON, 5G Transport and Radio products, Wi-Fi 6 access points, Point-to-multipoint Radios and Ground Surveillance Radars.

HFCL’s offerings in the Safe & Smart City domain include key core solutions like Communication/IT/Telecom infrastructure, Data Centre, Disaster Recovery and Management, Security, Surveillance, Traffic Management and Citizen/Mobile Applications.

HFCL has largest market share in optic fiber cable supplies in india.one of the largest producers WI-FI / UBR systems and FTTH cables in india.one of the largest implementer of defence and public communication network. Besides India, products are exported to the UK, Eastern Europe, Africa and Middle East as well as the South and South East Asian regions about 30 countries.

HFCL is certified with the ISO 27701:2019 standards, ISO 27701:2019 enhance security procedures and methods.

projects under implementation :

Public Telecommunication –

Optical fibre Cable & FTTH Network for Reliance Jio across Northern India.

BharatNet Phase-II OFC network, settingup Rural mobile network, WiFi, IP and MW network.

Current order book –Rs.1519 crore

Defence communication –optical backbone network in 300+ locations,for Indian armed forces.

Current order book-Rs. 2,354Crore

Railway communication –

Integrating communication network for dedicated freight corridor, metros & mainline railways, video management systems at 600 railway Stations , network for KanpurAgra, Mauritius and Dhaka Metro rail projects.

Current order book – Rs.381crore

In Dec.21,HFCL receive the approval as a ‘Trusted Source’ from National Security Council Secretariat (NSCS). this is a distinguished achievement and reinforce HFCL’s commitment to delivering Make in India world-class products/solutions.

HFCL  played a crucial role in BharatNet Phase -II project by deployment of 7843 Km of OFC Network in Punjab and 7733 Km in Jharkhand, and bringing broadband connectivity to 3200 villages in Punjab and 1789 villages in Jharkhand. HFCL will be a leading contender in the implementation of Phase III of the BharatNet Project,  Rs.70000 crore plus, Expected CAPEX investments from government of India in phase – III of BharatNet Project.

HFCL is amongst the major infrastructure provider  of more than 1.75lakh Km of OFC Rollout for Private Telecom Operators.

HFCL’s Long standing relationships with major clients –stakeholders –

JIO – AIRTEL – TATA –VODAFONE –BSNL –BBNL—NOKIA— ITI LTD.—EIL—

BHARAT ELECTRONICS – TCIL—RAILTEL—INDUS TOWER—HP –GLOBE.—

New opportunities for HFCL : Strong potential of the new business

There is huge potential of growth of  business as 5 g rollout begin and HFCL prepared to meet this growth prospectus well in time to explore this opportunity .(Total Addressable Market) of USD 32 bn during FY21-25 in India

USD 6.2 bn for OPTICAL FIBER/OPTICAL FIBER CABLE and Accessories

USD 7.8 bn for Telecom Equipment

USD 18 bn for 5G Equipment and Services

2022, India’s tower fibreisation stood at 33%, leaving plenty of room for growth as the country strives to reach 70% Huge opportunity for HFCL to assist in India’s target of achieving 70% tower fibre footprint by 2025. As of March of tower fibreisation by 2025. As a result, demand for optical fibre cable (OFC) networks and related solutions has risen significantly and is expected to increase further in the coming years.

The Indian Government as part of the National Broadband Mission (NBM) has decided to invest more than Rs.10,000 crore to lay Optical Fibre Cables along all upcoming Greenfield and Brownfield expressway corridors by NHAI*. The Indian Government will create a dark (inactive) fibre infrastructure which stakeholders in the market will be able to use in a direct plug and play model.

In addition Immense demand for fibre optic cables,Telecom and networking products across the world followed by expansion of 4G and evolution of 5G Network. HFCL is raising  annual Optical Fiber manufacturing capacity from 10 million fiber kilometres (fkm) to 22 million fkm and Optical Fiber Cable capacity from 24.75 million fkm to 34. 75 million fkm with a total outlay of Rs. 425 crores.Expanding OFC & fibre capacity at Hyderabad,Goa & Chennai , Setting up new facilities at Hyderabad for manufacturing of defence products.

As one of the largest infrastructure providers in South East Asia, HFCL recognised the potential of European markets and formed strategic alliances with local players in these regions to provide services for OFC / FTTH rollout.

Development and capex

December 14, 2021- HFCL has raised 600 crores via QIP issue. The QIP has shown an overwhelming response from the Institutional investors like Reliance Ventures, Quant Mutual Fund, IIFL Wealth, Elara India, Discovery, Segantii,The QIP proceeds shall be predominantly utilized towards funding of capital expenditure requirements for setting up of new manufacturing facilities, capacity expansions and expenditure on R&D and product development.

HFCL has entered into a partnership with Wipro  to engineer a variety of 5G Transport Products. Wipro is a key partner because of its world-class engineering and in-depth experience in hardware design, embedded software.

Also Collaboration Agreement with Qualcomm Technologies, Inc. USA for design and development. In continuation with its 5G product strategy for India and global markets.”Qualcomm Technologies is a recognized world leader in 5G technology.

HFCL appointed Beetel Teletech Ltd as National Distributor of  IO products. This will allow HFCL to strengthen  distribution network for existing and future product lines and  will be playing a key role in providing internet for all.

distribution network expansion with Ingram Micro India, which has a stronghold in channel distribution in India and SAARC countries On 21 feb2022, HFCL has joined the O-RAN ALLIANCE, a world-wide community of mobile network operators, vendors, and research & academic institutions operating in the Radio Access Network (RAN) industry. O-RAN ALLIANCE’s mission is to re-shape  more intelligent, open, virtualized and fully interoperable mobile networks.

HFCL,has Joint Venture with a Canadian enterprise DragonWave, for Point-to-Point Microwave Radio Links (IP radios up to 23Ghz).

HFCL recently appointed two global leaders for production technology and sales

Dr. Peter Weimann  the Chief Technology Officer, Optical Fibre Cable Business. His technology leadership will certainly take HFCL to greater heights of success and global expansion!

Mr. Jochen Arms, Vice President, Sales (DACH, Europe) – Optical Fibre Cable Business . With his exceptional skills and experience,

 

Valuation and outlook

Being the market leader,HFCL at a price-to-book ratio of 4.05x, trades at a premium .

A run up in HFCL’s share price by around 300 per cent in the previous calendar year has increased its valuation.HFCL is likely to continue to command this premium. Its market leadership, will add further glitter to the stock.

Mutual Funds have increased holdings from 1.84% to 1.86% in Jun 2022 qtr.

FII/FPI have increased holdings from 6.66% to 6.81% in Jun 2022 qtr.

 

Concerns-

  • Company has a low return on equity of 13.8% for last 3 years.
  • Promoters have pledged 44.7% of their holding.
  • Promoters have decreased holdings from 39.23% to 39.20% in Jun 2022 qtr
  • Dividend payout has been low at 2.63% of profits over last 3 years

Financials –

HFCL Creating consistent value for investors –

CAGR 5 year –

Revenue- 16.3%,  EBITDA –26.6% ,PAT – 21.4%.

Gross Margin – 26%,  EBITDA Margin- 14.7% RoCE- 19.3%, Debt-Equity -0.26x

Order Book as on 30th June,2022 ~INR 5,300 Cr + (~USD 671 mn)

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junk food

food

What is junk food?
‘Junk foods’ are foods that lack nutrients, vitamins and minerals, and are high in kilojoules (energy), salts, sugars, and fats. Junk food is so called because it doesn’t play a role in healthy eating, especially if it’s eaten to excess. Junk food is also known as discretionary food or optional food.

Some examples of junk food include: Continue reading

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International yoga day – 21st june

images

Its an inherent desire in humans to be happy. In india the ancient sages, through inquiry about life, were able to reach of state of consciousness in which the secrets of healthier, happier, and meaningful living were revealed to them. Sages called that secret and sacred knowledge ‘YOGA’ Continue reading

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subah jain-natural food expert – food as medicine

  • Subah Jain is a YouTuber and the founder of Satvic Movement, which is a non-profit organization that provides education about health coming from Vedas and Scriptures.
    • According to Subah when she was 17 years old, she suffered from PCOS, hypothyroidism, and excessive hair loss. She met Acharya Mohan Gupta who changed her diet and lifestyle. She only had plant-based cuisine, which cured her health issues. This is what motivated her to come close to nature.
      • Subah always desired to educate people about the health benefits of raw food. In 2018, Subah went to Living Light Culinary Institute to learn how to make healthy food delicious and to make delicious raw vegan recipes only using whole, fresh ingredients straight from mother nature with no sugar, no wheat, and no dairy. Her first raw vegan dish was Red beetroot ravioli with cashew filling & pepper puree.

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SHIVANGI DESAI – BEST HEALTH COACH

Mrs Shivangi Desai is a Certified Health and Life Coach. She is a Parenting Coach. Her videos on parenting tips have been watched by millions of people across the world. Her engaging live training sessions have been attended by lakhs of people. Her work has been recognized by numerous media including Divya Bhaskar, Sandesh, Gujarat Samachar, Ab Tak Channel and Radio Mirchi. She is also a Pranic Psychotherapist (World Pranic Healing Foundation, Philippines), Integrated Clinical Hypnotherapist (California Hypnosis Institute, USA), Reiki & Crystal Healer, Neuro-Linguistic-Programming Practitioner, Tarot Card Trainer, Handwriting Analyst, Angel Healer, Colour Therapist and a B-licensed…

 

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Make your Mind Peaceful in 5 mins – अनोखी विधि

this is a meditation to make your mind peaceful in 5 mins.

 

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अद्भुत ध्यान -wonderful meditation

योंगय मिंगयुर रिनपोछे के पास तिब्बत के प्राचीनबुद्ध धर्म ज्ञान को एक नए और आकर्षक तरीके से प्रस्तुत करने की दुर्लभ क्षमता है।  रिनपोचे  ने आधुनिक वैज्ञानिक अनुसंधान के साथ अपने स्वयं के व्यक्तिगत अनुभवों को ध्यान के अभ्यास से संबंधित किया।

 

तिब्बत और नेपाल के बीच हिमालयी सीमा क्षेत्रों में 1975 में जन्मे, योंगी मिंग्युर रिनपोछे एक बहुत ही प्रिय और निपुण ध्यान गुरु हैं। Continue reading

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ज़िंदगी को मज़ेदार बनाने के 10 आसान तरीके। How to make life more exciting

ये शानदार वीडियो है जो वास्तव में आपकी जिंदगी को मजेदार बना देगा।

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DON’T MIX TOO MUCH TOGETHER! ⁣ ⁣- खाद्य पदार्थों का मिश्रण मत करो

 

food

स्वास्थ्य के लिए एक स्वर्णिम नियम है  — – बहुत सारे खाद्य पदार्थों का मिश्रण मत करो,जब आप केवल एक प्रकार का फल, सब्जी या अनाज खाते हैं, तो आपका शरीर भोजन को अधिक आसानी से पचाता है , Continue reading

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अमीर बनने का नया विज्ञान – वैलेस डी वेटल्स – पुस्तक समीक्षा

 

ameerअकसर संसार में अमीरी को पूर्व जन्मों के कर्म या भाग्य से जोड़ कर देखा जाता है पर इस पुस्तक में बताया गया है कि किस प्रकार भाग्य की अवधारणा व्यर्थ है और ईशवर या दिव्यता हमेशा समृद्धि व् प्रचुरता का विस्तार करते हैं , वे आपके अभाव के जिम्मेदार नहीं। यह पुस्तक अमीर बनने के वैज्ञानिक नियमों को प्रभावशाली ढंग से समझाने में सफल है और कोई भी इन नियमों का पालन कर अपने जीवन को समृद्ध बना सकता है। Continue reading

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