HFCL Ltd Share Price – NSE  / BSE

Telecomm Equipment & Infra Services, Small Cap

HFCL-Rail Vikas Nigam (RVNL)-Aerial Telecom Solutions, a Consortium has been declared as the Lowest Bidders by Bharat Sanchar Nigam (BSNL), for bids valued at Rs 6,925 crore to provide middle-mile network in Uttar Pradesh (East) and Uttar Pradesh (West) under the BharatNet Phase III programme of the Government of India.

Additionally, the Consortium will be awarded 10 years of O&M order at an annual rate of 5.5% of capex for 1st five years and 6.5% for the subsequent five years which will be of worth Rs 4,155 crore, after commissioning of the first ring of network.

HFCL has also emerged as the top bidder for Punjab circle for a bid value of Rs 1244 crore in the BharatNet Phase III tenders, on standalone basis.

Furthermore, HFCL is expected to secure 10 years of O&M order valued at around Rs 746 crore with annual rates of 5.5% per annum of capex for 1st five years and 6.5% per annum of capex for next five years, after commissioning of the first ring of network.

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In a regulatory filing made during market hours today, the company announced HFCL-Rail Vikas Nigam (RVNL)-Aerial Telecom Solutions consortium has been declared as the lowest bidders by Bharat Sanchar Nigam (BSNL), for bids valued at Rs 6,925 crore to provide middle-mile network in Uttar Pradesh (East) and Uttar Pradesh (West) under the BharatNet Phase-III programme of the Government of India.

Additionally, the consortium will be awarded 10 years of O&M order at an annual rate of 5.5% of capex for 1st five years and 6.5% for the subsequent five years which will be of worth Rs 4,155 crore, after commissioning of the first ring of network.

HFCL has also emerged as the top bidder for Punjab circle for a bid value of Rs 1244 crore in the BharatNet phase III tenders, on standalone basis.

Furthermore, HFCL is expected to secure 10 years of O&M order valued at around Rs 746 crore with annual rates of 5.5% per annum of capex for 1st five years and 6.5% per annum of capex for next five years, after commissioning of the first ring of network.

The BharatNet Project is a landmark initiative by the Indian Government aimed at extending high-speed broadband connectivity to rural areas across the nation.

Mahendra Nahata, managing director of HFCL said: “Our proven track record in executing strategically critical projects, strengthens our standing as trusted partner of the Government of India.

HFCL is well placed with a diverse product line that includes routers, optical fiber cables, fiber connectivity solutions, transport solutions, power management solutions etc., to address the needs of the BharatNet Phase III program.

As a trusted BSNL partner, we look forward to continued collaborations and contributing significantly to the success of BharatNet Phase-III program.”

HFCL is a leading technology company specializing in digital networks for telcos, enterprises, and governments. With its strong R&D expertise and global system integration services, HFCL offers innovative solutions like 5G RAN, 5G Transport, Wi-Fi, and defense electronics. The company has manufacturing plants in India and a global customer base, committed to quality and environmental sustainability.

The company's consolidated net profit rose 4.50% to Rs 73 crore on 1.61% decline in revenue to Rs 1094 crore in Q2 September 2024 over Q2 September 2023.

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The key equity benchmarks traded with substantial losses in afternoon trade. The Nifty dropped below the 24,600 level. Auto shares declined after advancing for two consecutive trading sessions.

At 14:25 IST, the barometer index, the S&P BSE Sensex, was down 559.48 points or 0.67% to 80,558.65. The Nifty 50 index declined 193.25 points or 0.78% to 24,587.85.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index dropped 1.96% and the S&P BSE Small-Cap index tumbled 3.22%.

The market breadth was weak. On the BSE, 558 shares rose and 3,380 shares fell. A total of 92 shares were unchanged.

Economy:

According to the RBI article, findings on monetary policy transmission in India suggest that monetary policy changes affect short term interest rates more than long-term rates. RBI in this article examines the impact of the monetary policy tightening that was undertaken since May 2022 in India. While anticipated policy changes do not have any instantaneous impact on long-term rates, policy “surprises” significantly impact all market segments and across tenors. Policy signals tend to wane, however, beyond the three-year tenure, the paper noted.

Policy “surprises” are found to have a relatively lower but significant pass-through to the exchange rate and equity prices. In terms of the impact of the policy rate tightening on the real economy, a significant negative impact on inflation expectations is observed. The long-run elasticity of the policy rate with respect to inflation expectation reveals that an increase in policy rate anchors expectations effectively. As per the article, the macroeconomic impact of monetary policy on aggregate demand and inflation indicate that the 250 basis points increase since May 2022 has negatively contributed to aggregate demand and headline inflation by 160 bps each till Q2:2024-25, working through various channels of policy transmission.

Buzzing Index:

The Auto index declined 1.70% to 24,821.40. The index rose 0.96% in the past two trading session.

Exide Industries (down 4.1%), Mahindra & Mahindra (down 2.88%), Samvardhana Motherson International (down 2.43%), Tata Motors (down 2.36%) and Apollo Tyres (down 2.1%), Bharat Forge (down 2.06%), TVS Motor Company (down 1.85%), Maruti Suzuki India (down 1.73%), Ashok Leyland (down 1.58%) and Bosch (down 1.53%) declined.

Numbers to Track:

The yield on India's 10-year benchmark federal paper advanced 1.43% to 6.935 as compared with previous close 6.950.

In the foreign exchange market, the rupee was flat. The partially convertible rupee was hovering at 84.0750, compared with its close of 84.0750 during the previous trading session.

MCX Gold futures for 31 October 2024 settlement rose 0.39% to Rs 77,807.

The United States 10-year bond yield rose 0.65% to 4.214.

In the commodities market, Brent crude for December 2024 settlement shed 26 cents or 0.35% to $74.03 a barrel.

Stock in Spotlight:

HFCL declined 6.32%. The company‘s consolidated net profit rose 4.50% to Rs 73 crore on 1.61% decline in revenue to Rs 1094 crore in Q2 September 2024 over Q2 September 2023.

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Profit before tax in Q2 FY25 stood at Rs 102.47 crore, up by 8.8% from Rs 94.18 crore reported in Q2 FY24. Current tax expense rose 57.02% YoY to Rs 20.13 crore in the second quarter. EBITDA jumped 14.7% year on year to Rs 172 crore in Q2FY25. EBITDA margin improved to 15.71% as against 13.47% registered in Q2 FY25.

HFCL's managing director, Mahendra Nahata, highlighted the company's significant achievements in the second quarter, including a large-scale broadband network project for BSNL and a strategic partnership with GA-ASI for UAV development. Despite challenges posed by the global market and monsoon-related disruptions, HFCL's focus on new products, private customers, and international expansion is expected to drive improved revenue and profitability in the coming quarters.

HFCL is a leading technology company specializing in digital networks for telcos, enterprises, and governments. With its strong R&D expertise and global system integration services, HFCL offers innovative solutions like 5G RAN, 5G Transport, Wi-Fi, and defense electronics. The company has manufacturing plants in India and a global customer base, committed to quality and environmental sustainability.

Shares of HFCL dropped 5% to Rs 118.70 on the BSE.

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