Slide 1: Exchange filing cover letter: Earnings Presentation
HFCL/SEC/24-25 May 03, 2024 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.relations@b
Slide 2: Investor Presentation May 2024
Investor Presentation May 2024 HFCL LIMITED
Slide 3: Table of Contents
Table of Contents 1// Core 2// About the 3// Opportunity Business Company INVESTOR PRESENTATI ON 2024 4// ESG/CSR 5// Financials 6// Appendix HFCL LIMITED
Slide 4: Core Business
01 //06 Core 04// About HFCL 05// The Way Forward – 06// How Do We Plan INVESTOR PRESENTATI ON 2024 Where do we see To Get There? Business ourselves in 3 years? 07// The Way Forward – 08// Why HFCL? The Capabil ities and Difference Maker Execution HFCL LIMITED
Slide 5: About HFCL
About HFCL A technology-driven company providing Optical fiber Cable Countries of Manufacturing R&D communication & networking products & Supplier in India Presence Facilities Centres solutions to telecom, defence & railways sectors across the globe. #1 45+ 5 3 Defense Revenue Contribution In FY24 6
Slide 6: The Way Forward: Where do we see ourselves in 3 years?
The Way Forward Strategic Priority Where do we see ourselves in 3 years? 01 Strong penetration in Europe by Current Operations in intensifying presence through FY 2024 Netherlands subsidiary and upcoming manufacturing facility in Poland to capitalize on European RoCE demand Revenue ~ Rs. Product led
Slide 7: How Do We Plan To Get There?
How Do We Plan To Get There? • Focus on creating unique technology and advancing our 01 position in the telecommunication sector Innovation • Innovating 5G and 6G product portfolio • Shifting from Project-led revenue to Product-led 02 revenue resulting in increased product revenue, Product- lower wo
Slide 8: The Way Forward – Capacities & Capabilities
The Way Forward – Capacities & Capabilities Capacity Intellectual Execution Property Increasing the Increasing Intellectual Working with Indian manufacturing capacity property (IP) – Launch partners (Jio, BSNL, Voda of Optic fiber, Optic fiber more products designed Idea and Airtel) and also cable,
Slide 9: Why HFCL? The Difference Maker
Why HFCL? The Difference Maker Market Vertical Dedicated R&D Expanding Leader I ntegration Capabilities I nternational Presence Largest share in Optimized business 305+ R&D resources Operations in 45+ domestic supplies model and consistent across 3 research countries serving of Optic fiber supply ch
Slide 10: About the Company
02 //06 About the 11// Product 12// Product Portfolio 13// Product I nnovation- Portfol io contd.. Recent l aunches and products under devel opment INVESTOR PRESENTATI ON 2024 Company 14// Network Sol utions & Projects 15// Strong Domestic Presence 16// Growing I nternational Presence – Europe 17//
Slide 11: Product Portfolio
Product Portfolio Telecom Defence Networking Products Optic Fiber/ Optical Fibers Cables Electronics Products 1 2 3 1 2 3 1 2 3 4 5 4 5 4 6 7 5 6 7 INVESTOR PRESENTATI ON 2024 1. Point to Point Unlicensed Band Backhaul Radio (UBR) 1. Optic Fiber 1. Electronic FUZE 2. Indoor & Outdoor Wi-Fi 5 and 6 A
Slide 12: Product Portfolio
Product Portfolio Passive Connectivity Solutions Aerospace & Automotive -Wire Harness Portfolio 1 2 3 1 INVESTOR PRESENTATI ON 2024 2 4 5 6 1. Cable Assemblies 1. Aerospace and Defense cable assemblies 2. High Density Cabinets 2. Automotive cable assemblies 3. Fiber Termination Box 4. PLC Splitters
Slide 13: Product Innovation- Recent launches and products under development
Product Innovation- Recent launches and products under development Fuelled by a sharp focus on innovation, we have created a comprehensive suite of next-gen connectivity and 5G backhauling products : Recent Launches: IP/ MPLS Home Mesh Wi Fi 7 Outdoor Cloud Public Communications UBR 1. 5G Fixed Wire
Slide 14: Network Solutions & Projects
Network Solutions & Projects Public Telecommunication Defence Communication Railways INVESTOR PRESENTATI ON 2024 • Established player in large-scale • Dedicated Multi-Protocol Label • Transforming and modernizing Switching (MPLS) Network railway communication systems & telecom projects including Opt
Slide 15: Strong Domestic Presence
Strong Domestic Presence 2 1 4 5 4 HOSUR, TAMIL NADU (Through subsidiary company HTL Ltd) 3 • 660kkm/annum Aramid Reinforced Plastic (ARP) Rods • 504k km/annum Fiber Reinforced Plastic (FRP) Rods • 2,700 MT/ annum Impregnated Glass Fiber Reinforcement (IGFR) • 24k MT/ annum Polymer Compound All abov
Slide 16: Growing International Presence – Europe
Growing International Presence – Europe Revenue share of exports in OFC vertical Setting up state-of-the-art OFC 29% 70% 2024 2028/29* manufacturing plant in Poland for • Large demand – Expect 308 million homes in the EU region to have FTTH addressing the increasing connectivity by 2028, speeding up
Slide 17: Expanding Manufacturing Capacities
Expanding Manufacturing Capacities Setting up of new facility in NCR region for the manufacture of Further strengthening of backward Telecom and Networking integration products • Reduce dependence on external • Cumulative TAM of ~ 614 bn USD both suppliers for manufacturing of Optic globally and in
Slide 18: Shift in Revenue Mix
Shift in Revenue Mix Exports Revenue Share (IN %) 17.23 Shift from Project-led revenue to Product-led Increased business from revenue - Increase in product revenue will Private Entities in alignment facilitate lower working capital requirements, with market demand 11.21 quicker realization and margi
Slide 19: Key Customers
/19 INVESTOR PRESENTATI ON 2024 Key Customers
Slide 20: R&D: Powering towards a technology led Company
R&D: Powering towards a technology led Company Strengthened Segments No. of people in-house R&D 3 dedicated R&D centres in team 5G Products 131 Bengaluru, Hyderabad and Other Networking Products 95 Gurugram driving Defence 39 innovation. Optic fiber & Optical fiber 40 Cable Total 305 INVESTOR PRESEN
Slide 21: Strong Technology Partners
Strong Technology Partners Licensing for Open Partnership for 5G Partnership for 5G Small Partnership for 5G Small Design partner for Partnership for 5G Small source Wi-Fi 7 products ; Transport Products Cells Cells Macro Radio, Wifi Cells 5G millimeter wave FWA ; Access points, UBRs, product develo
Slide 22: Opportunity
03 //06 Opportunity 22/ What is our 23// Gl obal 24// Gl obal INVESTOR PRESENTATI ON 2024 Gl obal opportunity - OFC opportunity – 5G Opportunity? 25// Domestic Market 26// Domestic 27// Domestic Opportunity - 5G Opportunity - Opportunity - Tel ecom Defence 28// Domestic Opportunity - Rail ways HFCL
Slide 23: What is our Global Opportunity?
What is our Global Opportunity ? Telecom & 5G Railways 614.2 5.2 TAM TAM (In USD Bn) (In USD Bn) Focus on building infrastructure for next- Indian and Global generation broadband Government initiatives Strong incentive-led to modernize and Modernization of signaling networks globally as well push to
Slide 24: Global Opportunities - OFC
Global Opportunities - OFC HFCL aims to target 2% of the Addressable share in total TAM, which will result in significant growth in the next Broadband Allocation 4-5 years EU UK US Africa Germany – Broadband Broadband allocation of GBP Broadband allocation of USD Broadband allocation of USD allocati
Slide 25: Global Opportunities - 5G
Global Opportunities - 5G Impact/Opportunity Addressable product Portfolio under offerings / Cumulative TAM capitalization segment development (FY23-30)* • Cell Site Routers Modernization • DU (Distributed Unit) ~USD requirement for 5G Transport products Aggregation Routers transformation of transpo
Slide 26: Domestic Market Opportunities - 5G
Domestic Market Opportunities - 5G Opportunity Growth Driver* Cumulative TAM Addressable Opportunity by HFCL (FY23-30)* • 5G expected to account for 60% of total mobile subscribers by FY28 and 1,250 mn by FY30. ~USD ~USD Networking product Demand • Smartphone users are forecasted to consume 65 GB of
Slide 27: Domestic Opportunity – Telecom (Excluding 5G)
Domestic Opportunity – Telecom (Excluding 5G) Opportunity Growth Driver Under BharatNet Phase III project, the tenders of approx. 6 lakh cable Kms have been floated by BSNL in 16 packages & remaining approx. 5 lakhs cable km shall be procured directly by BharatNet Project the states. The value of pr
Slide 28: Domestic Opportunity - Defence
Domestic Opportunity - Defence Opportunity Growth Driver* Cumulative TAM Addressable Opportunity by HFCL (FY23-30)* • The Indian Defense capital expenditure was USD 19.0 Bn in FY 23 ~USD We target to address USD and is expected to reach USD 40.2 Bn by FY 30 2.8 Bn 300 mn in the next 5 years • Record
Slide 29: Domestic Railway Market Opportunities
Domestic Railway Market Opportunities Projects Growth Drivers & Cumulative TAM Available* Overall Project Costs* (FY23-30)* Dedicated Freight ~USD Corridors – 3 Dedicated Freight corridor projects Greenfield projects with 3 corridors with capital cost of USD 25 bn 0.85 Bn Automation of 15k kms rail
Slide 30: ESG/CSR
04 //06 ESG/CSR 30// ESG for 31// CSR: Giving 32// Governance: INVESTOR PRESENTATI ON 2024 Sustainabil ity Back to Society Guided by Exempl ary Leadership HFCL LIMITED
Slide 31: ESG for Sustainability
ESG for Sustainability Over the last few years, HFCL has emphasised on use of latest, efficient and environment friendly Improved Waste technologies and processes to reduce its Carbon footprints Image needed Management 24% reduction in total waste reduction in 2022-23 33% lesser waste disposed i
Slide 32: ESG for Sustainability: CSR, Giving Back to Society
ESG for Sustainability HFCL recognizes the importance of social ~₹39 Cr responsibility in fostering CSR Spend in positive change within its last 10 years Committed to stakeholders including employees and communities. the UN SDGs Aligned with 8 goals Building a Dynamic Workforce Workplace diversi
Slide 33: Governance: Guided by Exemplary Leadership
Governance: Guided by HFCL's robust governance framework is a guiding principle for responsible conduct, Exemplary Leadership rooted in ethical and transparent business practices as it underscores the Board's and management's commitment to fostering stakeholder trust. 6 Board Committees Operating wi
Slide 34: Financials
05 //06 Financials 34// Q4FY24 Key Highl ights – 35// FY24 Key Highl ights 36// Q4FY24 – Consol idated P&L INVESTOR PRESENTATI ON 2024 Consol idated Statement 38// FY24 – Consol idated 39// 37// FY24 – Consol idated Order book P&L Statement Bal ance Sheet 40// Key Ratios 41// Utilization of Fund rai
Slide 35: Q4FY24 Key Highlights - Consolidated
Q4FY24 Key Highlights - Consolidated Total Revenue EBITDA & Margin EBITDA (₹ IN CRORES) (₹ IN CRORES & %) EBITDA Margin 15.78 1,432.98 HFCL Secured landmark Rs.1,127 crore order to revolutionize 11.74 1,326.06 BSNL’s Optical Transport Network. 209.29 168.17 First Indian Company to secure Q4FY23
Slide 36: FY24 Key Highlights - Consolidated
FY24 Key Highlights - Consolidated Total Revenue EBITDA & Margin EBITDA PAT & Margin PAT (₹ IN CRORES) (₹ IN CRORES & %) (₹ IN CRORES & %) EBITDA Margin PAT Margin 4,743.31 15.28 7.56 14.04 4,465.05 6.7 665.86 682.13 317.71 337.52 FY23 FY24 FY23 FY24 FY23 FY24 Debt-Equity Ratio ROCE Diluted EPS INVE
Slide 37: Q4FY24 - Consolidated Profit & Loss Statement
Q4FY24 - Consolidated Profit & Loss Statement Change Change Particulars ( ₹ I N C R O R E S ) Q4FY24 Q3FY24 Q4FY23 Q-o-Q Y-o-Y Revenue from Operations 1,326.06 1,032.31 28.46% 1,432.98 -7.46% Other Income 13.61 46.72 13.74 Total Income 1,339.67 1,079.03 24.16% 1,446.72 -7.40% Total Expenses 1,130.38
Slide 38: FY24 - Consolidated Profit & Loss Statement
FY24 - Consolidated Profit & Loss Statement Particulars ( ₹ I N C R O R E S ) FY24 FY23 FY22 Revenue from Operations 4,465.05 4,743.31 4,727.11 Other Income 100.59 47.18 42.91 Total Income 4,565.64 4,790.49 4,770.02 Total Expenses 3,883.51 4,124.63 4,077.04 EBITDA 682.13 665.86 692.98 EBITDA Margin
Slide 39: FY24 - Consolidated Balance Sheet
FY24 - Consolidated Balance Sheet Equities & Liabilities ( ₹ I N C R O R E S ) FY24 FY23 FY22 Total -Shareholder Funds 3,999.83 3,144.14 2,818.37 NON CURRENT LIABILITIES (A) Financial Liabilities (i) Borrowings 169.21 110.37 121.25 (ii) Other Liabilities 9.07 6.20 19.34 (B) Other Non Current Liabili
Slide 40: Order book
Order book Order Book (IN ₹ CRORES) 7,6 85 Order book category wise Order book customer wise (I N ₹ C R O R E S ) (I N ₹ C R O R E S ) 4,758 890 Network Services 2,055 Products Private 7,01 0 INVESTOR PRESENTATI ON 2024 2,037 5630 O&M Government FY23 FY24 /39
Slide 41: Key Ratios
Key Ratios Debt to Equity Ratio Current Ratio (IN X) (IN X) 0.5 2.1 1.9 0.4 1.8 1.6 1.4 0.3 0.2 0.2 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 Return on Capital Employed Return on Equity INVESTOR PRESENTATI ON 2024 (IN %) (IN %) 21.6 14.2 12.8 19.8 19.2 11.6 10.1 15.6 8.4 13.5 FY20 FY21 FY22
Slide 42: Utilisation of Fund raising
Utilisation of Fund raising Original Modified Funds utilized as Unutilized amount Objects ( ₹ I N C R O R E S ) Allocation allocation on Dec-23 on Mar-24 Capex 75.00 NA 2.50 72.5 R&D 85.00 NA 83.02 1.98 Debt repayment/ prepayment 74.04 NA 74.04 0 Working Capital 75.00 NA 75.00 0 General Corporate Pu
Slide 43: Appendix
06 //06 Appendix 47// Governed by an 48// Led by an 50// Sharehol ders’ INVESTOR PRESENTATI ON 2024 Experienced Board Experienced I nformation Management Team (1/2) 51// Abbreviations / Description HFCL LIMITED
Slide 44: Governed by an Experienced Board
Governed by an Experienced Board AJAI KUMAR BHARAT PAL SINGH SURENDRA SINGH SIROHI MAHENDRA NAHATA Independent Director Independent Director Independent Director Promoter and Managing Director Ex-CMD Corporation Bank. Ex-Director-IDBI Bank. 3 decades IIT Kanpur. Ex-member of Telecom B.Com Hons. 4 de
Slide 45: 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) B.E. Mtech. Over 4 decades experience in CA, CS.
Slide 46: Led by an Experienced Management Team (2/2)
Led by an Experienced Management Team (2/2) DEVENDER KUMAR MANOJ BAID SANJAY VITHALRAO JORAPUR NAND LAL GARG PETER WEIMANN Executive President President & Company President – (Human Resources) President (Supply Chain) Chief Technology Officer (Project Delivery) Secretary (OFC) B.E., MBA. Over 2 deca
Slide 47: Shareholders’ Information
Shareholders’ Information Share Information (AS ON March 31, 2024) NSE Ticker HFCL BSE Ticker 500183 Shareholding as on 31 March, 2024 ( I N %) Market Cap (₹ Crores) 13,242.54 37.68 % free-float 62.10% 7.31 Promoters DII’S/ MF Free-float market cap (₹ Crores) 8,224 INVESTOR PRESENTATI ON 2024 Shares
Slide 48: Abbreviations / Description
Abbreviations / Description Abbreviation Description Abbreviation Description 3GPP 3rd Generation Partnership Project O&M Operating & Maintenance ARP Aramid Reinforced Plastic ARP Aramid Reinforced Plastic CAGR Compounded Annual Growth Rate Order book comprises anticipated CPE Consumer Premises Equi
Slide 49: Demonstrating Our Commitment: ISO Certifications as Pillars of ESG Integration
Demonstrating Our Commitment: ISO Certifications as Pillars of ESG Integration We have worked to ensure all our plants are ISO-certified regarding waste management and environmental safeguards to ensure that we are promoting sustainable production HFCL Certifications Goa Plant Hyderabad Plant Chenna
Slide 50: Thank You
01// H FCL AT A G L AN CE HFCL LIM ITED | INVESTOR PRESENTATI ON 2024 Thank You INVESTOR PRESENTATI ON 2024 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.
Slide 51: 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