Mehabe score: 6 G Factor: 4 Piotski Score: 5 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 5.
Description
HFCL Ltd is a diverse telecom infrastructure enabler with active interest spanning telecom infrastructure development, system integration, and manufacture and supply of high end telecom equipment, Optical Fiber and Optic Fiber Cable (OFC).#
Stock trades at 89.2, above its 50dma 56.24. It also trades above its 200dma 35.35. The stock remains bullish on techicals
The 52 week high is at 95.70 and the 52week low is at 11.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
-‘s median sales growth is 26.42% of last 10 years
Weakness
– The company has delivered a poor sales growth of 9.02% over past five years.
-Promoters have pledged 44.72% of their holding.
-Dividend payout has been low at 4.62% of profits over last 3 years
– has high debtors of 215.47 days.
-‘s cost of borrowing seems high
Competition
– The industry trades at a mean P/E of 36.3x. ITI trades at the industry’s max P/E of 1258.98x. HFCL trades at a P/E of 37.2x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 7.0. HFCL has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 37.5%. The max 1- month return was given by GTL Infra.: a return of 108.0 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 1207.0 cr compared to Rs 700.0 cr for period ended Jun 2020, a rise of 72.4%
Operating Profits reported at Rs 186.0 cr for period ended Jun 2021 vis-vis 79.0 for period ended Jun 2020 .
Operating Margins expanded 412.4 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.68 compared to Rs 0.66 for previous quarter ended Mar 2021 and Rs 0.16 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 4930.0 cr for period ended TTM vis-vis sales of Rs 4423.0 cr for the period ended Mar 2021, a healthy growth of 10.3%. The 3 year sales cagr stood at 1.3%.
Operating margins expanded to 13.0% for period ended TTM vis-vis 12.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 306.0 cr for period ended TTM vis-vis sales of Rs 239.0 cr for the period ended Mar 2021, rising 21.9%.
Company recorded a healthy Net Profit CAGR of 11.6% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 14.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 544% on a 1 Year basis vis-vis a return of 45% over the last 3 Years. – The compounded sales growth on a TTM bassis is 54% vis-vis a compounded sales growth of 11% over the last 3 Years. – The compounded profit growth on a TTM basis is 123% vis-vis a compounded profit growth of 13% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 2.18% vis-vis 1.66% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 55.69% vis-vis 56.22% for Dec 2020
Conclusion
– is expected to give good quarter
-‘s median sales growth is 26.42% of last 10 years – The company has delivered a poor sales growth of 9.02% over past five years.
-Promoters have pledged 44.72% of their holding.
-Dividend payout has been low at 4.62% of profits over last 3 years
– has high debtors of 215.47 days.
-‘s cost of borrowing seems high
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 56.24 and is trading at 89.2, thus bullish price action wise.
