🧵 At a Glance
HFCL wants to be India’s telecom backbone—from Wi-Fi 6 routers to OFC cables to defence-grade tech. But with 170 debtor days, collapsing profits, and a P/E of 72x, it’s starting to look more like aTechno TDS Delay Ltdthan a future-ready telecom bet.
📦 1. What Exactly Does HFCL Do?
“From Wi-Fi to Warfare” – is what HFCL might say on its pitch deck.
Here’s the breakdown:
- Telecom Products (57% of revenue):🔹 Wi-Fi 5/6 routers🔹 AI-driven network solutions🔹 Passive infra for data centers & FTTx
- OFC Cables: India’s largest supplier.
- Defence & Aerospace: Surveillance radars, weapon sights, tactical fibre
- Exports: Significant contribution from Africa, Europe, Middle East
HFCL has smartly pivotedaway from project-based revenue(read: slow cash flow) to product sales (read: faster margin, lower working cap).
So, why is it struggling?
💔 2. Profit Wala Problem: A Telecom Tale Gone
Sour
- TTM Net Profit: ₹173 Cr— down from ₹338 Cr in FY24.
- Q4FY25 Net Loss: ₹83 Cr
- TTM Sales Growth: -9%
- 5-Year Sales CAGR: 1%
- 5-Year PAT CAGR: -5%
HFCL is in a brutal “growth + margin + working capital” sandwich. 📉
| Quarter | Sales (₹ Cr) | Net Profit (₹ Cr) | OPM |
|---|---|---|---|
| Mar ’24 | 1,326 | ₹109 Cr | 15% |
| Jun ’24 | 1,158 | ₹111 Cr | 15% |
| Dec ’24 | 1,012 | ₹73 Cr | 15% |
| Mar ’25 | 801 | ₹(83) Cr | -5% |
They sold less, earned less, and then lost money. 🫠
📉 3. Margins Are Holding… But For How Long?
- FY25 OPM:11%
- Historical peak OPM:14–15%
- ROE (FY25):4.31%
- ROCE:7.67%
Basically, the company makestech gear with PSU-level returns. If this were cricket, HFCL is the wicketkeeper-batsman who drops catches and scores 20 runs at #8.
🧾 4. Fair Value Range (EduInvesting Style)
- FY25 EPS:₹1.23
