Slide 1: Exchange cover letter: Earnings Presentation
HFCL/SEC/23-24 October 19, 2023 The BSE Ltd. The National Stock Exchange of India Ltd. 1st Floor, New Trading Wing, Rotunda Building Exchange Plaza, 5th Floor, C – 1, Block G Phiroze Jeejeebhoy Towers, Dalal Street, Fort Bandra – Kurla Complex, Bandra (E) Mumbai – 400001 Mumbai – 400051 corp.relatio
Slide 2: Investor Presentation
Oct 2023 Investor /////////////////////////////////////////////////////////// Presentation ////////////////////////////////////////////////////// HFCL LIMITED
Slide 3: Contents
CONTENTS HFCL at a Glance Strategic Priorities Opportunity Competitive Landscape Advantage Social Financials Governance Appendix
Slide 4: HFCL at a glance
HFCL at a glance Presence in Key Industries Manufacturing Facilities across India Product Offerings Network Solution Offerings Research & Development Key Customers Order book 01
Slide 5: HFCL – At a Glance
HFCL – At a Glance A leading innovation - led technology enterprise • n-led communication Integrated technology enterprise products and Key Sectors solutions provider 91% Largest market share in Optic Fibre Cable (OFC) Innovative revenue contribution supplies in India in FY22 and product as on Q2 FY
Slide 6: Manufacturing Facilities across India
Manufacturing Facilities across India 1 2 3 5 Operational Manufacturing facilities across India HYDERABAD, TELANGANA 2 facilities CHENNAI, TAMIL NADU • 5.2 mn fkm/annum Optic Fiber Cables (Through subsidiary company HTL Ltd) • 432k cable km/annum FTTH Cables • 11.88 mn fkm/annum Optic Fiber Cables •
Slide 7: Product Offerings
Product Offerings Telecommu- Defense Optic Fiber/ Passive Wire Harness Products Under nication Electronics Optical Connectivity Portfolio Development Products Products Fibers Cables Solutions Telecommunication • 5G Indoor & Outdoor FWA CPE 1 2 1 2 1 2 • 5G Macro Radio Unit 1 2 1 Products (8T8R) • 5G
Slide 8: Network Solution Offerings
Network Solution Offerings Public Defense Communication Railways Communication Telecommunication Optical Fiber Cable and Fiber Monitoring & Optical Transport Network Management System Deployment of comprehensive solutions for building of wireless and optical telecommunications networks including Opt
Slide 9: R&D backbone for futuristic Portfolio
R&D backbone for futuristic Portfolio Establishment of 3 R&D centres in Bengaluru, Hyderabad and Gurugram. Focus areas include 5G innovation and Telecommunication products. Investing in technology, creating patent No. of portfolio and indigenous R&D capability. Specialization people 5G Business 124
Slide 10: Key R&D Partnerships
Key R&D Partnerships Licensing for Open Partnership for 5G Partnership for 5G Small Partnership for 5G Small Design partner for Partnership for Switches source Wi-Fi 7 products ; Transport Products Cells Cells Macro Radio, Wifi 5G millimeter wave FWA ; Access points, UBRs, product development; Cloud
Slide 11: Key Customers
Key Customers HFCL Limited | Investor Presentation Oct 2023
Slide 12: Order book
Order book 7010 7078 5280 ORDER BOOK CATEGORY WISE ORDER BOOK CUSTOMER WISE Q2FY23 FY23 Q2FY24 Products, 502 O&M, 1880 Private, 2123 Govt, 4955 Network Services, 4696 Figures in INR crores HFCL Limited | Investor Presentation Oct 2023
Slide 13: Opportunity Landscape
Opportunity Landscape Opportunity Landscape Global Opportunities – EU & UK Global Opportunities – US & Africa Global opportunities - 5G HFCL as a Global Provider Domestic Telecom Market Opportunities Significant OFC-related Project Opportunities Domestic 5G Market Opportunities Domestic Defense Mark
Slide 14: Opportunity Landscape: Global and Domestic
Opportunity Landscape How do We Plan Global to Grow? Domestic HFCL Limited | Investor Presentation Oct 2023 13
Slide 15: Global Opportunities – EU & UK
Germany – BMVI Nationwide Gigabit Plan Global Opportunities – EU & UK EUR 50 billion allocated for Fiber broadband deployments in Germany through 2025 to increase Fiber coverage from 5.4% of households to 50%. Of the total capital, EUR 12bn was committed by the federal government and rest from priva
Slide 16: Global Opportunities – USA & Africa
Global Opportunities – USA & AFRICA USA Under different federal programs, US is expected to distribute USD 97 bn of funding broadband infrastructure over the next 4-5 years. Main programs are Broadband Equity, Access and Deployment USA– Broadband allocation USA USD 97 bn (BEAD) program (USD 42.5 bn)
Slide 17: Global Opportunities - 5G
Global Opportunities - 5G Impact/Opportunity Addressable product Portfolio under Cumulative TAM capitalization segment development (FY23-30)* 87.3 Bn Modernization requirement for transformation of transport network for 5G Transport products Cell Site Router ~USD 5G DU (Distributed Unit) Aggrega
Slide 18: HFCL as a Global Provider
HFCL as a Global Provider Our Global presence Exports Revenue Share (IN %) H1FY24 14.36 FY23 17.23 FY22 7.68 FY21 4.54 Distribution contracts across North America and Europe. Operations in 45+ countries and 100+ clients globally Established subsidiaries in USA and Netherlands to cater to globa
Slide 19: Domestic Telecom Market Opportunities (Except 5G)
Domestic Telecom Market Opportunities (Except 5G) Opportunity Growth Driver* HFCL aided in deployment of Phase II which we believe BharatNet Project makes us a preferred prospective partner for Phase III For FY24, the spending from the USOF is pegged at Rs ~USD 16.1 bn TAM across FY23-FY30 10,400 cr
Slide 20: Significant OFC-related Project Opportunities
Significant OFC-related Project Opportunities National Broadband High Bandwidth Demand BharatNet Phase III Mission resulting into High Fiberization Under National Broadband Mission as of Towers BharatNet is the world largest rural broadband project connecting 250,000-gram panchayats across the count
Slide 21: Domestic Market Opportunities - 5G
Domestic Market Opportunities - 5G Opportunity Growth Drivers Portfolio under Cumulative TAM development (FY23-30)* 7.4 Bn 5G is expected to account for Networking product Demand around 60 per cent of total mobile Cell Site Router ~USD subscribers by FY2028 and 1,250 mn DU (Distributed Unit) A
Slide 22: Domestic Defense Market Opportunities
Domestic Defense Market Opportunities Opportunity Growth Driver Cumulative TAM (FY23-30) The Indian Defense capital expenditure was USD 19.0 Bn in FY 23 and is expected to reach USD 40.2 Bn by FY 30 ~USD 2.8 Bn Electronic fuses Efforts to Modernize Indian Record 75 per cent of the defence capita
Slide 23: Domestic Railway Market Opportunities
Domestic Railway Market Opportunities Projects Available* Growth Drivers & Cumulative TAM Overall Project Costs* (FY23-30)* Dedicated Freight Corridors – Greenfield projects with 3 corridors 3 Dedicated Freight corridor projects with capital cost of USD 25 bn USD 0.85 Bn Modernisation of signalling
Slide 24: Market Opportunity at a Glance
Market Opportunity at a Glance Cumulative % CAGR FY 23-30 (USD Bn)* FY 23-30 Telecom Products Global Domestic Global Domestic A) OFC/OFC Accessories 189.39 16.10 ≈7.19% ≈11.30% B) 5G Products Networking Products 87.28 7.44 ≈47.24% ≈58.63% RAN Products 281.83 20.60 ≈38.50% ≈72.64% System Integration
Slide 25: Strategic Priorities
Strategic Priorities Strategic Priorities Expanding Product Portfolio Expanding Global Reach Increased Manufacturing Capabilities Focus on R&D Shift in Revenue Mix 02
Slide 26: Strategic Priorities
Strategic Priorities Increased Manufacturing Expanding Product Capabilities and Portfolio Shift in Revenue Mix high-level backward integration Expanding Global Focus on R&D Improving Reach Profitability and rationalizing Working Capital HFCL Limited | Investor Presentation Oct 2023 25
Slide 27: Expanding Product Portfolio
Expanding Product Portfolio Significant investments for new Fresh initiatives to develop new product developments including Development of software-defined types of optical Fiber cables for Wi-Fi-7 enabled access points, point radios, thermal weapon sights and exports, alongside ensuring high to poi
Slide 28: Expanding Global Reach
Expanding Global Reach Exports constitute 14.36 % of Establishing subsidiaries and Focused on new geographies, total revenue in H1FY24 and branch offices across the Globe especially Europe, North has grown at a CAGR of 88.02% and also appointing distributors America and Africa as a in last three fin
Slide 29: Expanding Manufacturing Capabilities
Expanding Manufacturing Capabilities Setting up of new facility in NCR Planned expansion of manufacturing capacity of Planned Optical Fibre Cable capacity region for the manufacture of Optical fibre expansion Telecom and Networking products (IN mn fkm (IN mn fkm p.a) p.a) 33.90 35 25 10 Current Capa
Slide 30: Shift in Revenue Mix
Shift in Revenue Mix Shift from Project-led revenue to Product-led Increased business from Private Entities in Increased focus on Export-led revenue revenue - Increase in product revenue will alignment with market demand generation by leveraging on global demand facilitate lower working capital, qui
Slide 31: Competitive Advantage
Competitive Advantage 03
Slide 32: Why is HFCL Preferred? (1/2)
Why is HFCL Preferred? (1/2) Market Leader Long term customer In-House R&D Integrated End to End One of the largest relationship Manufacturing Network Provider Tech centric R&D driven Manufacturing key products under one manufacturers of Optical Fiber Partner for Reliance Jio in roof Proven ca
Slide 33: Why is HFCL Preferred? (2/2)
Why is HFCL Preferred? (2/2) Backward Healthy Financials Strong Order Book Global Focus Integration Key raw materials produced Debt: Equity Ratio of 0.24x Strong Order Book of Exports revenue share increased inhouse thereby acting as ₹ 7078 crores diversified to 14.36% in H1FY24 Signifies Lo
Slide 34: Social Governance
Social Governance ESG CSR 04
Slide 35: Roadmap for Environment Sustainability
Roadmap for Environment Sustainability HFCL's management has developed a clear roadmap with targeted initiatives for various manufacturing facilities to reduce the Company's environmental footprint and boost savings. Facility Location Sustainability Initiatives Expected Outcomes Installation of a 1
Slide 36: ESG as a Prime Directive
ESG as a Prime Directive Sustainable Packaging Reduced Energy Consumption Utilization of corrugated paper sheet instead of plastic during the process of packaging and Replacement of conventional lighting by LED reengineering of packaging drums to save wood across facilities and offices and fuel
Slide 37: CSR: Giving Back to Society
CSR: Giving Education Initiatives (Past and current) Back to Society PROJECT SAMARTH: Adopted specially-abled children and providing grants for their education. Healthcare Aid Providing Computer Skill Training to the underprivileged youth at our five Computer Learning Centers in Ghazipur (U.P.
Slide 38: Financials
Financials Q2FY24 Key Highlights - Consolidated Q2FY24 Consolidated Income Statement H1FY24 Key Highlights - Consolidated H1FY24 Consolidated Income Statement 05
Slide 39: Q2FY24 Key Highlights - Consolidated
Q2FY24 Key Highlights - Consolidated Bagged orders from Madhya Pradesh Jal Nigam worth ₹1,015 Crs for Total Revenue (₹ IN CRORES) EBITDA & Margin (₹ IN CRORES & %) providing EPC services. 1173.47 1111.49 Bagged order from one of the largest 14.9% 13.5% Telecom operator worth ~ ₹ 220 Crs for the
Slide 40: Q2FY24 - Consolidated Profit & Loss Statement
Q2FY24 - Consolidated Profit & Loss Statement Change Change Particulars ( ₹ I N C R O R E S ) Q2FY24 Q1FY24 Q2FY23 Q-o-Q Y-o-Y Revenue from Operations 1111.49 995.19 11.69% 1173.47 -5.28% Other Income 17.17 13.17 (4.12) Total Income 1128.66 1008.36 11.93% 1169.35 -3.48% Total Expenses 978.89 848.74
Slide 41: H1FY24 Key Highlights - Consolidated
H1FY24 Key Highlights - Consolidated Total Revenue (₹ IN CRORES) EBITDA & Margin (₹ IN CRORES & %) PAT & Margin (₹ IN CRORES & %) 2224.48 2106.68 14.7% 6.9% 13.7% 6.2% 304.35 309.39 137.40 145.73 H1FY23 H1FY24 H1FY23 H1FY24 H1FY23 H1FY24 PAT Margin EBITDA Margin Debt-Equity Ratio (IN X) RoCE Diluted
Slide 42: H1FY24 - Consolidated Profit & Loss Statement
H1FY24 - Consolidated Profit & Loss Statement Change Particulars ( ₹ I N C R O R E S ) H1FY24 H1FY23 Y-o-Y Revenue from Operations 2106.68 2224.48 -5.30% Other Income 30.34 9.11 Total Income 2137.02 2233.59 -4.32% Total Expenses 1827.63 1929.24 EBITDA 309.39 304.35 1.66% EBITDA Margin (%) 14.69% 13.
Slide 43: Appendix
Appendix Management Team Board of Directors Shareholders’ Information Abbreviations / Description 06
Slide 44: Led by an Experienced Management Team (1/2)
Led by an Experienced Management Team (1/2) SUBODH KUMAR GARG VIJAY RAJ JAIN JITENDRA SINGH CHAUDHARY HARSHWARDHAN PAGAY Executive Director (Growth Strategy) Group Chief Financial Officer Executive President (Communications) Executive President (OFC) PETER WEIMANN RAJESH JAIN MANISH GANGEY JAYANTA D
Slide 45: Led by an Experienced Management Team (2/2)
Led by an Experienced Management Team (2/2) DEVENDER KUMAR JOCHEN ARMS SANJAY VITHALRAO JORAPUR NAND LAL Garg Vice President, Sales (DACH, Europe) Executive President (Project Delivery) (OFC) President – (Human Resources) President (Supply Chain) ROB GILBERT SUNIL KUMAR PANDEY MANOJ BAID ANDREW WEST
Slide 46: Governed by an Experienced Board
01 02 Governed by an Experienced Board 01 MAHENDRA NAHATA Promoter and Managing Director 03 04 05 02 AJAI KUMAR Independent Director 03 BHARAT PAL SINGH Independent Director 04 SURENDRA SINGH SIROHI Independent Director 06 07 05 TAMALI SEN GUPTA Independent Director 06 ARVIND KHARABANDA Non-Executiv
Slide 47: Shareholders’ Information
Shareholders’ Information Share Information HFCL in Numbers as on 30 September, 2023 (AS O N S e p t e mb e r 3 0 , 2 0 2 3 ) 49.51% 37.84% NSE Ticker HFCL BSE Ticker 500183 Others Promoters Market Cap (₹ Crores) 11,011.55 % free-float 83.09% Free-float market cap (₹ Crores) 9,149.50 Shares Outstand
Slide 48: Abbreviations / Description
Abbreviations / Description Abbreviation Description Abbreviation Description 3GPP 3rd Generation Partnership Project O&M Operating & Maintenance ARP Aramid Reinforced Plastic OFC Optic Fiber Cable CAGR Compounded Annual Growth Rate Order Book Order book comprises anticipated revenues from the unexe
Slide 49: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars ( ₹ I N C R O R E S ) H1FY24 FY23 FY22 FY21 Revenue from Operations 2106.68 4,743.31 4,727.11 4,422.96 Other Income 30.34 47.18 42.91 36.13 Total Income 2137.02 4,790.49 4,770.02 4,459.09 Total Expenses 1827.63 4,124.63 4,077.04 3,873.38 EBITDA 309.39
Slide 50: Consolidated Balance Sheet
Consolidated Balance Sheet Equities & Liabilities ( ₹ I N C R O R E S ) H1FY24 FY23 FY22 FY21 Total -Shareholder Funds 3,604.41 3,144.14 2,818.37 1,923.47 NON CURRENT LIABILITIES (A) Financial Liabilities (i) Borrowings 132.16 110.37 121.25 250.78 (ii) Other Liabilities 20.64 6.20 19.34 54.97 (B) Ot
Slide 51: Thank you
Thank you /////////////////////////////////////////////////////////// Corporate Office Amit Agarwal 8, Commercial Complex, HEAD – INVESTOR RELATIONS Masjid Moth, HFCL Limited Greater Kailash Part 2, Tel: +91-11-3520 9400 New Delhi, Delhi - 110048 Email: ir@hfcl.com //////////////////////////////////
Slide 52: Disclaimer
Disclaimer This presentation (“Presentation”) does not constitute a prospectus, offering memorandum or an offer, or a solicitation of any offer, to purchase or sell any securities. This presentation should not be considered as a recommendation that any investor should subscribe to or purchase any se