Corporate Development     

Published: September 30, 2023
Updated: September 30, 2023

HFCL

Riding global demand for OFCs

HFCL, a leading technology enterprise with operations in manufacturing high-end telecom equipment, optical fibre, optical fibre cables and communication network solutions for the telco, defence and railway sectors, has fared better in its Q1June 2023 performance.

The order book is quite comfortable at Rs 6,585 crore as on August 26, 2023. Even there after, the company secured an order worth Rs 1,015 crore from Madhya Pradesh Jal Nigam, a state government undertaking, for laying optical fibre cables on critical and important routes for the execution of a multi-village drinking water supply network in Sheopur district of the state. The project will be executed by the company within 24 months, in collaboration with Khilari Infrastructure Pvt Ltd as a consortium partner.

GLOBAL REVENUES

Commenting on the company’s performance, Mahendra Nahata, Managing Director, HFCL, said, “Despite the volatile global macro-economic environment, the Indian telecom industry looks promising and is expected to emerge as one of the top 5G ecosystems in the entire world. HFCL has also sustained its growth momentum with its strategic initiatives focusing on margin-accretive products, a shift in the revenue mix from projects to products, backward and horizontal integration, capacity expansion, research & development, tapping new geographies and widening the customer base.”

Continuing, Mr Nahata said, “During Q1FY24, we have significantly increased revenues from the international business to Rs 176.23 crore, witnessing a growth of 156% on a yoy basis. HFCL’s strategy to focus on increased revenue from products, expand its capacities and tap into new geographies has resulted in an increase in the product revenue share to 67% in Q1FY24, as compared to 59% in the same quarter last year. Revenue from private customers has also increased significantly in the last few quarters.”

Outlining HFCL’s broad strategic moves, Mr Nahata added, “The company has entered into a significant partnership with Bharat Electronics Limited, India’s largest defence PSU, for a two-year MoU to develop indigenous technologies for the defence, telecom and railway sectors. As we are seeing strong fibre demand from our customers across the globe, we have revised our optical fibre manufacturing capacity expansion plan upwards by about 300% to 33.90 mn fkm/pa. The proposed expansion will bolster our margins and also ensure supply chain stability.”

On the status of product development, Mr Nahata said, “HFCL is developing a number of products for 5G networks which are expected to start being commercially available in the current financial year.” He added that open-source Wi-Fi 7 Access Points developed in collaboration with Qualcomm will also be available within the current financial year

FUTURE TECH

The company’s in-house R&D centres located at Gurugram, Bengaluru and Hyderabad, along with invested R&D houses and other R&D collaborators at different locations in India and abroad, aim at a futuristic range of technology products and solutions. HFCL has developed capabilities to provide premium quality optical fibre and optical fibre cables, state-of-the-art telecom products including 5G radio access network (RAN) products, 5G transport products, WiFi systems (WiFi 6, WiFi 7), unlicensed band radios, switches, routers and software defined radios

HFCL has state-of-the-art optical fibre and optical fibre cable manufacturing facilities at Hyderabad and Goa and at its subsidiary, HTL Limited, in Chennai. The company also has facilities for the manufacture of some backward integrated products at Hosur in its subsidiary, HTL Limited. The company has been selected for the government’s PLI scheme and is eligible for incentives upto Rs 653 crore for manufacturing telecom products.

U.K. PROJECT

In another new important development, HFCL announced very recently the launch of its revolutionary Intermittently Bonded Ribbon (IBR) cables in the UK. The basis of the new cables is individual IBR, each made up of 12 optical fibres which are bonded together at specific intervals along their lengths. One of the significant features of the new cable family is the high-productivity mass fusion splicing which enables both faster installation and quick restoration in case of an accidental outage.

Sharing his pleasure over the development, Mr Nahata said, “HFCL aims to play a crucial role in deploying high-speed internet connectivity to speed up fiberisation across the UK with the launch of its IBR cables. Our uniquely designed IBR cables are perfectly suitable to meet the goals of the UK government to put all households in reach of fibre to the premises (FTTP) by 2033 and accelerate 5G expansion.”

Mr Nahata added, “We believe that HFCL’s in-house R&D capabilities and expertise in innovating and customizing high-quality next-gen solutions, within a quick turnaround time according to our customer needs, will enable us to emerge as a partner of choice. We are committed to expanding our presence in the UK and contributing to its government’s nationwide infrastructure upgrade along with leading enterprises and telcos. With a solid presence in key global markets such as India, the UK, the US, the Middle East, France and Germany, we continue on our mission to build a sustainable global digital economy.”

STRONG VERTICALS

HFCL has become stronger in all three verticals which have bright prospects. In the telecom and cable division, it is set to expand its footprint in India and overseas, especially with entry in the UK market with IBR fibre cables. In the defence vertical, the company has broadened its prod-uct offerings, including integrating a fibre network overlay with GIS maps, satellite images and commercial land base data for the Indian defence forces. Likewise, leveraging its telecommunications network experience as well as comprehensive project management capabilities. HFCL has become an important player in the railways to create modern communication and signalling systems for metros, mainline railways and freight corridors. One can safely conclude that the company has the potential, within the next two years, to accelerate its growth momentum.