Slide 1: Regulation 30 cover letter to stock exchanges
HFCL/SEC/22-23 January 24, 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 Dec 2022
DEC 2022 Investor /////////////////////////////////////////////////////////// Presentation ////////////////////////////////////////////////////// HFCL LIMITED
Slide 3: Contents
CONTENTS HFCL at a Glance Strategic Priorities and Market Opportunities Competitive Social Advantage Governance Financials Appendix
Slide 4: HFCL at a glance
HFCL at a glance Telecom Offerings Looking Forward Presence in Key Industries Product Offerings Network Solution Offerings Ongoing Projects Manufacturing Facilities across India 01
Slide 5: HFCL – Telecom Offerings
HFCL – Telecom Offerings HFCL in Numbers Capacity Expansion Revenue Growth ₹ IN CRORES (2011 – 2019) FY13 FY15 607 2,553 FY19 4,738 Expanded Optical Fibre Cable capacity from 0.45 mn fkm to 18.5 mn fkm 4,738 34.10% 6-year CAGR Strengthened project execution division for capitalizing on emerging
Slide 6: HFCL – Looking Forward
HFCL – Looking Forward HFCL in Numbers Revenue Growth Innovation Focused ₹ IN CRORES FY22 4,727 (2019 – Today) FY21 4,423 • Set up of Greenfield Facility for the manufacture of Optic Fibre with an annual FY20 3,839 capacity of 10mn fkm as backward integration for strengthening supply chain and • mar
Slide 7: HFCL – Presence in Key Industries
HFCL – Presence in Key Industries Telecom and Cable Defence Railways 78% Revenue Contribution 19% Revenue Contribution 03% Revenue Contribution One of the largest manufacturer and supplier of OFC in India One of the largest Defence Network Leveraging our capabilities of next- Rolling out backbon
Slide 8: Product Offerings
Product Offerings Telecommu- Defence Optic Fiber/ Passive Products Under Development nication Electronics Optical Connectivity Products Products Fibers Cables Solutions Telecommunication • Point-to-multipoint Unlicensed band radio • Access Routers • Passive optical network (PON) products • 5G RAN –
Slide 9: Network Solution Offerings
Network Solution Offerings Public Defence Communication Railways Communication Telecommunication Optical Fiber Cable and Optical Fiber Monitoring & Management System Transport Network Multi Protocol Label Switching Network Microwave Radio Backhaul Solution Deployment of comprehensive solutions for b
Slide 10: Ongoing Projects
Ongoing Projects Public Defence Railway Telecommunication and EPC Communication Communication ₹ 3,976+ Cr ₹ 1,935+ Cr ₹ 309+ Cr (USD 480+ mn) Current Order Book (USD 233+ mn) Current Order Book (USD 37+ mn) Current Order Book Rollout of exclusive and dedicated nationwide DWDM based optical transmi
Slide 11: Manufacturing Facilities across India
Manufacturing Facilities across India 1 2 3 5 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 • 10 mn fkm/a
Slide 12: Strategic Priorities & Market Opportunities
Strategic Priorities & Market Opportunities The Way Forward Strategic Priorities Strategic Growth Drivers Key Partnerships Market Opportunities Growth Opportunity Landscape Focusing on Global 5G opportunities HFCL as a Global Provider Domestic Telecom Market Opportunities Significant OFC-related Pro
Slide 13: The Way Forward
The Way Forward Expanding Product Increased Portfolio Manufacturing Capabilities and high-level backward Poised to integration Win Expanding Global Expanding Reach Customer Base HFCL Limited | Investor Presentation Dec 2022 12
Slide 14: Strategic Priorities: Expanding Product Portfolio
Strategic Priorities Expanding Product Portfolio Significant investments for new Development of software-defined Fresh initiatives to develop new Constant innovation in the fields of product developments including radios, thermal weapon sights and types of optical Fiber cables for 5G, 6G and Telecom
Slide 15: Strategic Priorities: Expanding Global Reach
Strategic Priorities Expanding Global Reach Exports constitute 18.30% of total Established two new wholly-owned Focused on new geographies, Became first Indian company to revenue in 9MFY23 and its expected subsidiaries in the Texas (USA) and especially Europe, North America offer TIP OpenWiFi based
Slide 16: Strategic Priorities: Increasing Manufacturing Capabilities
Strategic Priorities Increasing Manufacturing Capabilities Phased OFC capacity expansion to 35.08 mn Expanding manufacturing capacity of Optical Setting up of new Assembly unit in fkm p.a. from 25.08 mn fkm p.a. to increase Fiber to 24.94 mn fkm p.a. from 10 mn fkm p.a. in NCR region for the manufac
Slide 17: Strategic Growth Drivers: Increased R&D
Strategic Growth Drivers Increased R&D Establishment of 2 R&D centres in Bengaluru and Investing in technology creation, research and Investing in a 6G Taskforce to study various Gurugram. Focus areas include 5G innovation, creating new industry standards, patent portfolio aspects like new waveforms
Slide 18: Strategic Growth Drivers: Shift in Revenue Mix
Strategic Growth Drivers 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 l
Slide 19: Key Partnerships
Key Partnerships Partnership for 5G Partnership for open Partnership for 5G Partnership for Artificial Partnership for Software Partnership for Switches Transport Products innovation in 5G indoor small cells. Intelligence (Al) based Defined Radios Analytics. Design partner for Partnership for 5G Sma
Slide 20: Key Stakeholders
Key Stakeholders HFCL Limited | Investor Presentation Dec 2022
Slide 21: Opportunity Landscape
Opportunity Landscape How do We Plan Global Growth Landscape to Grow? Domestic Growth Landscape HFCL Limited | Investor Presentation Dec 2022 20
Slide 22: Growth Opportunity Landscape – Global (1/2)
Growth Opportunity Landscape – Global (1/2) Germany – BMVI Nationwide Gigabit Plan EUR 43 billion allocated for Fiber broadband deployments in Germany through 2025 to increase Fiber coverage from 5.4% of households to 17.7%. Of the total capital, EUR 12bn Germany– Broadband allocation EUR 43 bn comm
Slide 23: Growth Opportunity Landscape – Global (2/2)
Growth Opportunity Landscape – Global (2/2) USA Under the Broadband Equity, Access and Deployment (BEAD) program, US government has allocated USD 42.5 bn to support states expand the high-speed broadband service network. Additional USA– Broadband allocation USA USD 68 bn USD 25 bn committed under th
Slide 24: Focusing on Global 5G opportunities
Focusing on Global 5G opportunities Impact/Opportunity Addressable product Portfolio under Cumulative TAM capitalization segment development (FY23-28)* 50.7 Bn Modernization requirement for transformation of transport network for 5G Transport products Cell Site Router ~USD 5G DU (Distributed Uni
Slide 25: HFCL as a Global Provider
HFCL as a Global Provider Our Global presence Exports Revenue Share (IN %) 9M FY23 18.31 FY22 7.62 FY21 4.54 FY20 3.19 Large Distribution contracts across EU, Middle East, Africa Meta (Facebook) recognized HFCL’s value in technology development and has been Operations in 30+ countries and 80+
Slide 26: Domestic Telecom Market Opportunities (Except 5G)
Domestic Telecom Market Opportunities (Except 5G) Opportunity Growth Driver* BharatNet Project HFCL aided in deployment of Phase II resulted in our being a strategic partner for Phase III ~USD 9.6 bn TAM across FY23-FY28 for OF/OFC and Accessories* Increased Domestic demand for OFC for dedicated Rig
Slide 27: Domestic Telecom Market Opportunities: PLI Scheme
Domestic Telecom Market Opportunities (Except 5G) Production-Linked Incentive (PLI) Scheme HFCL received approval from the Ministry of Communications And Information Technology to receive incentives up to ₹ 652.79 crore under the Production-linked Incentive (PLI) scheme for telecom products includin
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 The Indian Government has decided to lay Optical of Towers BharatNet is the world largest rural broadband project connecting 250,000-gram panchayats acr
Slide 29: Domestic 5G Market Opportunities
Domestic 5G Market Opportunities Opportunity Growth Drivers Portfolio under Cumulative TAM development (FY23-28)* 4.6 Bn Networking product Demand 500 million mobile subscribers Cell Site Router expected to use 5G by FY28 ~USD DU (Distributed Unit) Aggregation Routers CU (Centralized Unit) A
Slide 30: Domestic Defence Market Opportunities
Domestic Defence Market Opportunities Opportunity Growth Driver Cumulative TAM (FY23-28) Government Budget Initiative 68% capital procurement budget earmarked for domestic industry in 2022-23, compared to ~USD 2.1 Bn Electronic fuses Efforts to Modernize Indian 58% in 2021-22 defence networks an
Slide 31: Domestic Railway Market Opportunities
Domestic Railway Market Opportunities Projects Available* Growth Drivers & Cumulative TAM Overall Project Costs* (FY23-28)* Dedicated Freight Corridors – Greenfield projects with 3 projects in DPR stage Projects with capital cost of construction of USD 24.4 bn in the DPR stage USD 0.7 Bn Modernisati
Slide 32: Market Opportunity at a Glance
Market Opportunity at a Glance Cumulative % CAGR FY 23-28 (USD Bn)* FY 22-28 Telecom Products Global Domestic Global Domestic A) OFC/OFC Accessories 121.2 9.6 ≈7% ≈10% B) 5G Products Networking Products 50.7 4.6 ≈59% ≈108% RAN Products 177.3 12.2 ≈65% ≈89% System Integration (SI) Service demand 175.
Slide 33: Competitive Advantage
Competitive Advantage Our Right to Win 03
Slide 34: Why is HFCL Preferred? (1/2)
Why is HFCL Preferred? (1/2) Market Leader Partnership In-House R&D Integrated End to End Leadership in Optical Fiber Manufacturing Network Provider Tech centric R&D driven Manufacturing key products under one Production in India Partner for Reliance Jio in roof Proven capabilities under compa
Slide 35: Why is HFCL Preferred? (2/2)
Why is HFCL Preferred? (2/2) Backward Healthy Financials Strong Order Book Global Focus Integration - A force multiplier Key raw materials produced Debt: Equity Ratio of 0.25x Strong Order Book of Exports increased to 18.31% of inhouse thereby acting as ₹ 7,064 crores diversified revenue in 9M
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 Save between 88-126 kWh energy per month per site of packaging drums to save wood and fuel Replacement of convent
Slide 38: CSR: Giving Back to Society
CSR: Giving Back to Society Education Initiatives SAMARTH - Adopted 46 specially-abled children Healthcare Aid and providing grants for their education. SAMARPAN - Education & prevention of Running 7 Mobile Medical Clinics at different malnutrition amongst street children. locations for provid
Slide 39: Financials
Financials Q3FY23 Key Highlights - Consolidated Q3FY23 Consolidated Income Statement 9MFY23 Key Highlights - Consolidated 9MFY23 Consolidated Income Statement Diversified Revenue Streams 05
Slide 40: Q3FY23 Key Highlights - Consolidated
Received approval of application under Q3FY23 Key Highlights - Consolidated the Production Linked Incentive (PLI) Scheme, filed by the Company, to avail incentives up to Rs.652.79 crores over a period of 5 years. Total (₹ IN CRORES) EBITDA (₹ IN CRORES PAT (₹ IN CRORES Diluted EPS (IN ₹) Revenue &
Slide 41: Q3FY23 Consolidated Income Statement
Q3FY23 Consolidated Income Statement Particulars ( ₹ I N C R O R E S ) Q3-FY23 Q2-FY23 Change Q-o-Q Q3-FY22 Change Y-o-Y Revenue from Operations 1086 1173 -7.47% 1215 -10.65% Other Income 6 9 4 Total Income 1092 1182 -7.66% 1219 -10.47% Total Expenses 899 1007 1045 EBITDA 193 175 10.73% 174 10.75% E
Slide 42: 9MFY23 Key Highlights - Consolidated
9MFY23 Key Highlights - Consolidated With strategic focus on shift in revenue mix from projects to more of products, Total Revenue (₹ IN CRORES) EBITDA & Margin (₹ IN CRORES & %) PAT & Margin (₹ IN CRORES & %) Company is able to sustain its revenue by expanding product range, customer base 3,544 4
Slide 43: 9MFY23 Consolidated Income Statement
9MFY23 Consolidated Income Statement Particulars ( ₹ I N C R O R E S ) 9M-FY23 9M-FY22 Change Y-o-Y Revenue from Operations 3310 3544 -6.60% Other Income 34 13 Total Income 3344 3557 -5.99% Total Expenses 2846 3018 EBITDA 498 539 -7.72% EBITDA Margin (%) 15.03% 15.22% -19 Bps Depreciation 62 55 Fina
Slide 44: Diversified Revenue Streams
Diversified Revenue Streams Exports Revenue Share (IN %) Revenue Share by Type (IN %) of Customers 18.31 59 51 68 82 7.62 4.54 3.19 41 49 32 18 FY20 FY21 FY22 9M FY23 FY20 FY21 FY22 9M FY23 Government Private HFCL Limited | Investor Presentation Dec 2022 43
Slide 45: Appendix
Appendix Management Team Board of Directors Shareholders’ Information Abbreviations / Description 06
Slide 46: Led by an Experienced Management Team (1/2)
Led by an Experienced Management Team (1/2) S.K. GARG V.R. JAIN JITENDRA CHAUDHARY HARSH PAGAY Executive Director (Growth Strategy) Group Chief Financial Officer Executive President (Communications) Executive President (OFC) DR. PETER WEIMANN RAJESH JAIN COL B.B. SINGH Jayanta Dey Chief Technology O
Slide 47: Led by an Experienced Management Team (2/2)
Led by an Experienced Management Team (2/2) DEVENDER KUMAR JOCHEN ARMS SANJAY JORAPUR N.L. Garg Executive President (Project Delivery) VP, Sales (DACH, Europe) (OFC) President – (Human Resources) President (Supply Chain) SUNIL KUMAR PANDEY MANOJ BAID ANDREW WESTERMAN VP, International Sales SUBHAS M
Slide 48: 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 DR TAMALI SEN GUPTA Independent Director 06 ARVIND KHARABANDA Non-Execu
Slide 49: Shareholders’ Information
Shareholders’ Information Share Information HFCL in Numbers (AS O N D e c e mb e r 3 1 , 2 0 2 2 ) 51.81% 39.24% NSE Ticker HFCL BSE Ticker 500183 Others Promoters Market Cap (₹ Crores) 10,147.0 % free-float 69.92% Free-float market cap (₹ Crores) 6,181.66 Shares Outstanding 1,37,77,58,321 3M ADTV (
Slide 50: 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 ATO Automatic Train Operation Order Book Order book comprises anticipated revenues from the unexecuted
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: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars ( ₹ I N C R O R E S ) FY20 FY21 FY22 Revenue from Operations 3,839 4,423 4,727 Other Income 22 35 43 Total Income 3,861 4,458 4,770 Total Expenses 3,345 3,873 4,077 EBITDA 516 584 693 EBITDA Margin (%) 13.44% 13.21% 14.66% Depreciation 42 69 78 Financ
Slide 53: Consolidated Balance Sheet
Consolidated Balance Sheet Equities & Liabilities ( ₹ I N C R O R E S ) FY20 FY21 FY22 Debt-Equity Ratio (IN X) Dividend* (IN %) Total -Shareholder Funds 1,668 1,924 2,818 NON CURRENT LIABILITIES FY22 0.26 FY22 18% (A) Financial Liabilities (i) Borrowings 201 251 121 FY21 0.48 FY21 15% (ii) Other Li
Slide 54: 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