Hfcl Limited · NSE:HFCL
Hfcl — Q2 FY2023 Earnings Presentation
47 slides from Hfcl's earnings presentation, Oct 20, 2022
Slide 1: Stock exchange cover letter: Earnings Presentation
HFCL/SEC/22-23 October 20, 2022 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 September 2022
Investor Presentation September 2022 HFCL Limited
Slide 3: Index
INDEX HFCL at a Glance 03 Opportunity Landscape 13 22 Strategic Priorities Financial Drivers 28 ESG 34 Appendix 38 HFCL Limited | Investor Presentation 2
Slide 4: HFCL at a Glance
HFCL at a Glance 01 02 03 04 05 06 01 HFCL at a Glance HFCL Limited | Investor Presentation 3 Hyderabad Facility
Slide 5: A leading innovation-led technology enterprise
HFCL at a Glance 01 02 03 04 05 06 A leading innovation-led technology enterprise Integrated next-gen communication Key Sectors products and solutions provider 76% Largest market share in Optic Fibre Cable (OFC) of Revenue supplies in India Innovative product offerings Public Telecommunication Compr
Slide 6: Creating consistent value for investors
HFCL at a Glance 01 02 03 04 05 06 A leading innovation-led technology enterprise Creating consistent value for investors 16.3% 26.6% 21.4% Revenue – EBITDA – PAT – 5 year CAGR 5 year CAGR 5 year CAGR 26.0% 14.7% 19.3% Gross Margin EBITDA Margin RoCE 0.26x ~INR 5,280 Cr + (~USD 649 mn) Debt-Equity O
Slide 7: Our product offering
HFCL at a Glance 01 02 03 04 05 06 Our product offering Optic Fibre / Optical Fibre Cables Telecommunication Products Defence Electronics Passive Connectivity Solutions Armoured Cable Micro Cable Point to Point Indoor & Outdoor Electro Optical Electronic Fuses Unlicensed band Wi-Fi 5 and 6 Access De
Slide 8: Comprehensive network solutions
HFCL at a Glance 01 02 03 04 05 06 Comprehensive network solutions Public Telecommunication Solutions Defence Communication Solutions Railway Communications Comprehensive solutions for building of wireless and Solutions optical telecommunications networks Optical fibre Cable and Optical Fibre Monito
Slide 9: Marquee network projects under implementation
HFCL at a Glance 01 02 03 04 05 06 Marquee network projects under implementation Public Defence Railway Telecommunication Communication Communication Rolling out backbone and backhaul Optical fibre Cable Rollout of exclusive and dedicated nationwide DWDM Implementing telecom networks for seven green
Slide 10: Long standing relationships with major stakeholders
HFCL at a Glance 01 02 03 04 05 06 Long standing relationships with major stakeholders HFCL Limited | Investor Presentation 9
Slide 11: Our global presence
HFCL at a Glance 01 02 03 04 05 06 Our global presence Customers in 30+ Countries Canada Irelan d German UK Poland Hungary 2 R&D Centres of Excellence USA y Romania Austria Solvenia Czech Republic Albani in Bengaluru & Gurugram Portugal Spain a Turkey Greece Cyprus Mexico Jordan Nepal Qatar Egypt Ba
Slide 12: State-of-the-art facilities buoyed by capacity expansion
HFCL at a Glance 01 02 03 04 05 06 State-of-the-art facilities buoyed by capacity expansion 5 Manufacturing facilities across India Hyderabad, Telangana Chennai, Tamil Nadu 1 2 3 with capacities of: (through subsidiary company HTL Ltd) 10 mn fkm 4.2 mn fkm 11.75 mn fkm Optic fibre OFC OFC 23.95 mn f
Slide 13: Focusing on Global 5G opportunities
HFCL at a Glance 01 02 03 04 05 06 Focusing on Global 5G opportunities Addressable product Portfolio under Impact/Opportunity Cumulative market size segment development capitalization (FY21-25) 5G Transport products • Cell Site Router Modernization requirement for • DU (Distributed Unit) Aggregation
Slide 14: Opportunity Landscape
02 Opportunity Landscape HFCL Limited | Investor Presentation 13
Slide 15: The world's 2nd largest telecom market at an inflection point
01 Opportunity Landscape 02 03 04 05 06 Telecom The world’s 2nd largest telecom market with 2nd highest internet users at an inflection point Driven by Fast-tracked by Economic impact of 5G - estimated to reach Budget 2022 impetus USD 1 trillion by 2035 5G spectrum allocation in July 2022 to facilit
Slide 16: Demand boost across the portfolio
01 Opportunity Landscape 02 03 04 05 06 Telecom Demand boost across the portfolio TAM over FY21-25 ~USD 6.2 bn TAM ~USD 7.8 bn TAM for ~USD 18 bn TAM for for OF/OFC and Accessories Telecom Equipment 5G Equipment and Services Total Addressable Market (TAM) of USD 32 bn during FY21-25 in India HFCL Li
Slide 17: Leveraging India's BharatNet Project
01 Opportunity Landscape 02 03 04 05 06 Leveraging the world’s largest rural broadband connectivity program (India’s BharatNet Project) The project is both an enabler and a key beneficiary of other key government schemes, such as Digital India, Make in India, the National e-Governance Plan, UMANG, B
Slide 18: Opportunity to assist India's target of 70% tower fibre by 2025
01 Opportunity Landscape 02 03 04 05 06 Huge opportunity for HFCL to assist in India’s target of achieving 70% tower fibre footprint by 2025 As of March 2022, India’s Government initiatives under tower fibreisation stood at 33%, leaving plenty of National Broadband Mission room for growth as the The
Slide 19: Capitalising on global opportunities
01 Opportunity Landscape 02 03 04 05 06 Capitalising on global opportunities United Kingdom – Project Gigabit £5 billion capital allocated by the UK government to build next-generation gigabit broadband for over one million Our response hard-to-reach homes and businesses with 85% coverage by 2025 an
Slide 20: Modernisation drive in India's defence forces
01 Opportunity Landscape 02 03 04 05 06 Defence New vistas opened by modernisation drive in India’s defence forces Driven by Fast-tracked by Import reduction from 65% to 30% by FY32 on Budget 2022 impetus the back of initiatives like Aatma Nirbhar Bharat, 68% capital procurement Make in India, Defen
Slide 21: Robust demand across product segments
01 Opportunity Landscape 02 03 04 05 06 Defence Robust demand across product segments Market size per year by FY25 ~USD 2.9 bn ~USD 0.39 bn ~USD 0.20 bn Software Electro-optics Electronic fuse defined radio (SDR) TAM for HFCL in defence electronics in India expected to be USD 3.5 bn for a year by FY
Slide 22: Transforming the world's 4th largest rail network
01 Opportunity Landscape 02 03 04 05 06 Railways Transforming the world’s 4th largest rail network Driven by Overall Project Costs Opportunity Dedicated Freight Corridors – Projects with capital cost of construction Greenfield projects with 3 projects in DPR stage of USD 24.4 bn in the DPR stage, li
Slide 23: Strategic Priorities
03 Strategic Priorities HFCL Limited | Investor Presentation 22
Slide 24: HFCL's accelerated growth strategy
01 02 Strategic Priorities 03 04 05 06 HFCL’s accelerated growth strategy Focusing on upcoming opportunities Integral part of Building new structures to focus in Telecom, Defence and Railways India’s digital journey on key specialization areas Market opportunity of ~USD 130 bn in 5G alone Implementi
Slide 25: HFCL's accelerated growth strategy
01 02 Strategic Priorities 03 04 05 06 HFCL’s accelerated growth strategy Expanding manufacturing Product mix shift to margin accretive Extending capacities own designed products market reach Expanding OFC & fibre capacity at Hyderabad, Aim to increase our revenue mix coming from Exports of OFC and
Slide 26: Using R&D backbone for a futuristic portfolio
01 02 Strategic Priorities 03 04 05 06 Using R&D backbone for a futuristic portfolio Strategic focus areas Distinctive Investment in technology Strengthen offering in offerings including 5G solutions key application sectors Strengthened by In-house R&D team Partnering with renowned Products under pl
Slide 27: Towards product-led growth
01 02 Strategic Priorities 03 04 05 06 Towards product-led growth Revenue mix to shift towards margin accretive products through expanded capacity in OFC/FTTH segment and development of new telecom & defence electronics products 43% 58% Leading to 57% 42% • Access to new geographies • Uniform revenu
Slide 28: Intensifying global footprint to capitalize on demand
01 02 Strategic Priorities 03 04 05 06 Intensifying global footprint to capitalize on demand Opportunities in exports Multiple inquiries received for new products PLI making exports immensely attractive and profitable Leveraging core strengths Products at par with international New Product Design St
Slide 29: Financial Drivers
04 Financial Drivers HFCL Limited | Investor Presentation 28
Slide 30: Q2FY23 Key Highlights - Consolidated
01 02 03 Financial Drivers 04 05 06 Q2FY23 Key Highlights - Consolidated • HFCL and Qualcomm announced EBITDA & Margin (%) partnership for 5G outdoor small cell Total Revenue 15.44% 1173 development and 5G millimeter wave FWA 1122 14.88% product development • HFCL launched WiFi 7 access point, 5G 8T
Slide 31: Q2FY23 Consolidated Income Statement
01 02 03 Financial Drivers 04 05 06 Q2FY23 Consolidated Income Statement Change Change Particulars (INR crores) Q2-FY23 Q1-FY23 Q2-FY22 Q-o-Q Y-o-Y Revenue from Operations 1,173 1,051 11.65% 1,122 4.58% Other Income 9 20 4 Total Income 1,182 1,071 10.38% 1,126 4.97% Total Expenses 1,007 941 953 EBIT
Slide 32: H1FY23 Key Highlights - Consolidated
01 02 03 Financial Drivers 04 05 06 H1FY23 Key Highlights - Consolidated • HFCL and Wipro announced 5G product development Total Revenue EBITDA & Margin (%) PAT & Margin (%) partnership 15.66% 2329 2224 7.58% 6.18% • HFCL and Qualcomm announced partnership for 5G outdoor 13.68% 177 138 small cell de
Slide 33: H1FY23 Consolidated Income Statement
01 02 03 Financial Drivers 04 05 06 H1FY23 Consolidated Income Statement Change Particulars (INR crores) H1-FY23 H1-FY22 Y-o-Y Revenue from Operations 2,224 2,329 -4.48% Other Income 29 9 Total Income 2,253 2,338 -3.65% Total Expenses 1,949 1,973 EBITDA 304 365 -16.56% EBITDA Margin (%) 13.68% 15.66
Slide 34: Diversified Revenue Streams
01 02 03 Financial Drivers 04 05 06 Diversified Revenue Streams Exports Revenue Share (%) Revenue Share by Type of Customers (%) 17 51 59 68 84 8 5 3 41 49 32 16 FY20 FY21 FY22 H1FY23 FY20 FY21 FY22 H1FY23 Government Private HFCL Limited | Investor Presentation 33
Slide 35: ESG
05 ESG HFCL Limited | Investor Presentation 34
Slide 36: Environmentally-conscious operations
01 02 03 04 ESG 05 06 Environmentally-conscious operations Sewage Treatment Plant Partnership with Greentek (STP) of capacity 30 KL per Reman for e-waste day to recycle all domestic management wastewater at Goa plant Sustainable packaging Replacement of using corrugated paper conventional lighting b
Slide 37: Committed to community welfare
01 02 03 04 ESG 05 06 Committed to community welfare Healthcare Education Old age care MMUs PEHAL SHEOWS Running 5 Mobile Medical Clinics at different locations for providing Contributing for smart classes projects in government Constructed women’s wing of old age home and preventive healthcare faci
Slide 38: In Summary
01 02 03 04 ESG 05 06 In Summary Investments in R&D and Network Solution Technology Capabilities Expansion of Venturing into frontiers of Capacities technology 5G, Defence Equipment, Manufacturing under Make in India Program etc. Continuous backward Expanding Global integration in Market Access OFC
Slide 39: Appendix
06 Appendix HFCL Limited | Investor Presentation 38
Slide 40: Consolidated Profit & Loss Statement
01 02 03 04 05 Appendix 06 Consolidated Profit & Loss Statement Particulars (INR crore) FY22 FY21 FY20 Revenue from Operations 4,727 4,423 3,839 Other Income 43 35 22 Total Income 4,770 4,458 3,861 Total Expenses 4,077 3,873 3,345 EBITDA 693 584 516 EBITDA Margin (%) 14.66% 13.21% 13.44% Depreciatio
Slide 41: Consolidated Balance Sheet
01 02 03 04 05 Appendix 06 Consolidated Balance Sheet Assets (INR crore) H1FY23 FY22 FY21 FY20 Equities & Liabilities H1FY23 FY22 FY21 FY20 (A) Property plant & Equipment 474 465 443 437 (INR crore) (B) Capital Work in Progress 89 47 12 15 (A) Share Capital 138 137 128 128 (C) Right-of-use-Assets 23
Slide 42: Led by an experienced management team
01 02 03 04 05 Appendix 06 Led by an experienced management team S.K. Garg V.R. Jain Jitendra Chaudhary Harsh Pagay Executive Director Executive President Group Chief Financial Officer Executive President (OFC) (Growth Strategy) (Communications) Dr. Peter Weimann Col B.B. Singh Rajesh Jain Jayanta D
Slide 43: Share price performance and shareholding pattern
01 02 03 04 05 Appendix 06 Share price performance and shareholding pattern Share Price Performance (Jul’22-Sep’22) Listed on BSE and NSE (Scrip code BSE: 500183 & NSE: HFCL) 90 62000 Shareholding Pattern (as at 30th Sep 2022) 80 60000 70 58000 60 50 56000 39.20% 40 54000 51.67% 30 52000 20 50000 10
Slide 44: Abbreviations / Description
01 02 03 04 05 Appendix 06 Abbreviations / Description Order book comprises anticipated revenues from the unexecuted portions of existing contracts (including signed contracts for Order Book which all pre-conditions to entry into force have been met & letters of acceptance issued by the customer pri
Slide 45: Thank you
Thank you Amit Agarwal Head – Investor Relations HFCL Limited Tel: +91-11-3520 9400 Email: ir@hfcl.com Corporate Office 8 Commercial Complex, Masjid Moth, Greater Kailash Part 2, New Delhi, Delhi 110048 HFCL Limited | Investor Presentation
Slide 46: Governed by an experienced Board
01 02 03 04 05 Appendix 06 Governed by an experienced Board Mahendra Nahata Bharat Pal Singh Surendra Singh Sirohi Dr.Tamali Sen Gupta Promoter and Independent Director Independent Director Independent Director Managing Director Ajai Kumar Arvind Kharabanda Dr. R. M. Kastia Independent Director Non-
Slide 47: 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