HFCL plunges 9% on falls in Q3 profit, margin pressure

NEW DELHI: Shares of HFCL plummeted 9.3 per cent in early trade on Tuesday as the domestic telecom gear maker posted 4.7 per cent decline in consolidated profit to Rs 81.1 crore for the third quarter ended December 31, 2021, mainly on account of hike in component prices, especially semiconductors.

The company had posted a profit after tax of Rs 85.11 crore in the same period a year ago.

The scrip touched a low of Rs 88.10 as against the previous close of Rs 96.35 on the National Stock Exchange.

Revenue declined 4.86 per cent during the quarter to Rs 1,215.21 crore compared to Rs 1,277.48 crore it posted in the same quarter of 2020-21.

"Although the demand in the economy is coming back gradually, we had a strong quarter with growth in revenues. The margins during the quarter got slightly impacted followed by increased logistic costs and increase in fiber and semiconductor prices," HFCL Managing Director Mahendra Nahata was quoted as saying in a PTI report.

The company during the quarter raised Rs 600 crore through qualified institutional placement to expand capacities and build network solution capabilities to tap the upcoming opportunities in the telecom and defence sectors, PTI’s report said.

According to Nahata, the company's board has approved the plan for expansion of fiber manufacturing capacities from 1 crore fiber kilometer (fkm) per annum to 2.2 crore fkm and consolidated optical fiber cable (OFC) manufacturing capacities from 2.47 crore fkm per annum to 3.47 crore fkm per annum with an overall capital outlay of about Rs 425 crore.

"We remain optimistic about the outlook of the sector. The government's approval for our PLI scheme candidature will help us in improving our competitiveness, collaborate with new players and venture into new geographies," Nahata said, according to PTI.