Hfcl Limited · NSE:HFCL
Hfcl — Investor Presentation (August 2023)
51 slides from Hfcl's investor presentation, Aug 9, 2023
Slide 1: Schedule of Investors' Meeting notice
Date: August 09, 2023 BSE Limited National Stock Exchange of India Limited Corporate Relations Department Listing Department Phiroze Jeejeebhoy Towers Exchange Plaza, Plot No. C/1, G Block, Dalal Street Bandra Kurla Complex Fort, Mumbai 400 001 Bandra (East), Mumbai 400051 Maharashtra, India Maharas
Slide 2: Investor Presentation
Aug 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 Product Offerings Network Solution Offerings Manufacturing Facilities across India Ongoing Projects HFCL Journey 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 Innovative 83% Largest market share revenue in Optic Fibre Cable (OFC) product contribution supplies in India in FY22 and offerings a
Slide 6: HFCL – Presence in Key Industries
HFCL – Presence in Key Industries Telecom and Cable Defense Railways One of the largest manufacturer and supplier of OFC in India Leading technology company that Leveraging our telecommunications offers end-to-end solutions establishing Rolling out backbone and backhaul OFC & FTTH network for Re
Slide 7: Product Offerings
Product Offerings Telecommu- Defense Optic Fiber/ Passive Products Under Development nication Electronics Optical Connectivity Products Products Fibers Cables Solutions Telecommunication • 5G Indoor & Outdoor FWA CPE • 5G Macro Radio Unit Products (8T8R) • 5G Indoor & Outdoor Small Cell (2T2R and 4T
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: 5 Operational Manufacturing Facilities across India
Manufacturing Facilities across India as on 31 March 2023 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
Slide 10: Ongoing Projects
Ongoing Projects Public Defense Railway Telecommunication and EPC Communication Communication ₹ 3,591.67+ Cr ₹ 1,846.57+ Cr ₹ 656.92+ Cr (USD 437.91+ mn) Current Order Book (USD 224.92+ mn) Current Order Book (USD 80.01+ mn) Current Order Book Rollout of dedicated nationwide DWDM based optical tra
Slide 11: HFCL Journey (2011–2019)
HFCL Journey HFCL in Numbers Capacity Expansion Revenue Growth ₹ IN CRORES (2011 – 2019) FY13 FY15 606.53 2553.07 FY19 4737.79 *Expanded Optical Fibre Cable capacity from 2.04 mn fkm to 18.5 mn fkm 4,737.79 40.86% 6-year CAGR Strengthened project execution division for capitalizing on emerging o
Slide 12: HFCL Journey (2020–2023)
HFCL Journey HFCL in Numbers Revenue Growth ₹ IN CRORES Innovation Focused FY23 4743.31 FY22 4727.11 (2020 – 2023) FY21 4422.96 • Set up of Greenfield Facility for the manufacture of Optic Fibre with an annual FY20 3838.91 capacity of 10mn fkm as backward integration • One of the largest manufacture
Slide 13: Strategic Priorities
Strategic Priorities Strategic Priorities Expanding Product Portfolio Expanding Global Reach Increased Manufacturing Capabilities Focus on R&D Shift in Revenue Mix Key Partnership & Stakeholders 02
Slide 14: 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 Key Partnership & Reach Stakeholders HFCL Limited | Investor Presentation Aug 2023 13
Slide 15: 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 16: Expanding Global Reach
Expanding Global Reach Exports constitute 17.71 % of Established two new wholly- Focused on new geographies, total revenue in Q1FY24 and owned subsidiaries in the Texas especially Europe, North has grown at a CAGR of 88.02% (USA) and Amsterdam America and Africa as a in last three years (Netherlands
Slide 17: Expanding Manufacturing Capabilities
Expanding Manufacturing Capabilities Setting up of new facility in NCR Planned expansion of manufacturing capacity of Planned OFC capacity expansion to 34.75 mn region for the manufacture of Optical Fiber to 33.90 mn fkm p.a. from 10 mn fkm fkm p.a. from 25.08 mn fkm p.a. Telecom and Networking prod
Slide 18: Focus on R&D
Focus on R&D Establishment of 2 R&D centres in Bengaluru and Investing in technology, creating patent portfolio Investing in development of various use cases for Gurugram. Focus areas include 5G innovation and indigenous R&D capability. taking advantage of 5G technology such as 5G and Telecommunicat
Slide 19: 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 20: Key Partnerships & Stakeholders
Key Partnerships & Stakeholders Design Partner for Partnership for 5G Partnership for Artificial Macro Radio, Wifi Transport Products Intelligence (Al) based Partnership for Switches Partnership for 5G Small Partnership for 5G Small Access points, UBR, Analytics. Cells Cells Cloud Management system,
Slide 21: 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 22: Opportunity Landscape: How Do We Plan to Grow?
Opportunity Landscape How do We Plan Global to Grow? Domestic HFCL Limited | Investor Presentation Aug 2023 21
Slide 23: 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 24: 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 25: 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 26: HFCL as a Global Provider
HFCL as a Global Provider Our Global presence Exports Revenue Share (IN %) Q1FY24 17.71 FY23 17.23 FY22 7.68 FY21 4.54 Distribution contracts across North America and Europe. Established subsidiaries in USA and Netherlands to cater to global demand, expand business operations Exports to Revenu
Slide 27: 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 28: 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 29: 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 30: 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 31: 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 32: 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 33: Competitive Advantage
Competitive Advantage 03
Slide 34: 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 35: 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 0.25x Strong Order Book of Exports increased to 17.71% of inhouse thereby acting as ₹ 6584.71 crores diversified revenue in Q1FY24 compared to
Slide 36: Social Governance
Social Governance ESG CSR 04
Slide 37: 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 reengineering Replacement of conventional lighting by LED across of packaging drums to save wood and fuel facilities and offices
Slide 38: 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 Education & prevention of malnutrition amongst street children Running Mobile Medical units at different Providing
Slide 39: Financials
Financials Q1FY24 Key Highlights - Consolidated Q1FY24 Consolidated Income Statement Diversified Revenue Streams 05
Slide 40: Q1FY24 Key Highlights - Consolidated
Q1FY24 Key Highlights - Consolidated Bagged orders from Reliance worth ~ ₹ 411.51 Crores for supply of optical fibre Total Revenue (₹ IN CRORES) EBITDA & Margin (₹ IN CRORES & %) PAT & Margin (₹ IN CRORES & %) cables and point-to-point unlicensed band 1051.02 radios. 995.19 7.6% 16.0% Bagged ord
Slide 41: Q1FY24 - Consolidated Profit & Loss Statement
Q1FY24 - Consolidated Profit & Loss Statement Change Change Particulars ( ₹ I N C R O R E S ) Q1FY24 Q4FY23 Q1FY23 Q-o-Q Y-o-Y Revenue from Operations 995.19 1432.98 -30.55% 1051.02 -5.31% Other Income 13.17 13.74 13.23 Total Income 1008.36 1446.72 -30.30% 1064.25 -5.25% Total Expenses 848.74 1278.5
Slide 42: Appendix
Appendix Management Team Board of Directors Shareholders’ Information Abbreviations / Description 06
Slide 43: 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 44: 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 45: 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 46: Shareholders' Information
Shareholders’ Information Share Information HFCL in Numbers as on 30 June 2023 (AS O N J u n e 3 0 , 2 0 2 3 ) 50.63% 39.24% NSE Ticker HFCL BSE Ticker 500183 Others Promoters Market Cap (₹ Crores) 8,944.41 % free-float 82.47% Free-float market cap (₹ Crores) 7,376.45 Shares Outstanding 1,37,77,58,3
Slide 47: 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 48: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars ( ₹ I N C R O R E S ) FY21 FY22 FY23 Revenue from Operations 4,422.96 4,727.11 4,743.31 Other Income 36.13 42.91 47.18 Total Income 4,459.09 4,770.02 4,790.49 Total Expenses 3,873.38 4,077.04 4,124.63 EBITDA 585.71 692.98 665.86 EBITDA Margin (%) 13.2
Slide 49: Consolidated Balance Sheet
Consolidated Balance Sheet Equities & Liabilities ( ₹ I N C R O R E S ) FY21 FY22 FY23 Total -Shareholder Funds 1,923.47 2,818.37 3,144.14 NON CURRENT LIABILITIES Debt-Equity Ratio (IN X) Dividend (IN %) (A) Financial Liabilities (i) Borrowings 250.78 121.25 110.37 (ii) Other Liabilities 54.97 19.34
Slide 50: 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 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