Hfcl Limited · NSE:HFCL
Hfcl — Q1 FY2023 Earnings Presentation
45 slides from Hfcl's earnings presentation, Jul 23, 2022
Slide 1: Exchange filing cover letter: Earnings Presentation
\ HFCL Limited 8, Commercial Complex, Masjid Moth, Greater Kailash - II, New Delhi -110048, India Tel : (+91 11) 3520 9400, 3520 9500 Fax: (+9111) 3520 9525 Web : www.hfcl.com Email secretarial@hfcl.com HFCL/SEC/22-23 July 23, 2022 The BSE Ltd. The National Stock Exchange of India Ltd. 1 st Floor, N
Slide 2: Investor Presentation June 2022
Investor Presentation June 2022 HFCL Limited
Slide 3: Index
INDEX HFCL at a Glance 03 Opportunity Landscape 13 22 Strategic Priorities Financial Drivers 28 ESG 32 Appendix 36 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 79% 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 5,300 Cr + (~USD 671 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 Acc
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 Op
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
Slide 10: Long standing relationships with major stakeholders
HFCL at a Glance 01 ••••• 02 03 04 05 06 Long standing relationships with major stakeholders ~ ~4.-'freedom ~ MErRO EXPRESS G ~~fibre- airtel TATA ITI LIMITEO (A~of-~> • BSNL SCCI alphatrack vodafone ' II MAVFLE)! A Sonepar Company NOKIA °'½~.,_J. I J : , ~ ~ W l ~ ;.,11 SAUDI RAILWAYS ORGANIZATION
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 Austria y _----------__J,j ..----- -Romania Solvenia Czech Republic Albani Portugal - • Spain Greece a Turkey Cyprus in Ben
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) 8 mn fkm 4.2 mn fkm 11.75 mn fkm Optic fibre OFC OFC 23.95
Slide 13: Focusing on commercialization of Global 5G opportunities
HFCL at a Glance 01 ••••• 02 03 04 05 06 Focusing on commercialization of 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 (Di
Slide 14: Opportunity Landscape
02 Opportunity Landscape HFCL Limited | Investor Presentation 13
Slide 15: World's 2nd largest telecom market at an inflection point
• 01 Opportunity Landscape Telecom 02 •••• 03 04 05 06 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
Slide 16: Demand boost across the portfolio
• 01 Opportunity Landscape Telecom 02 •••• 03 04 05 06 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
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, U
Slide 18: Opportunity in India's 70% tower fibre target 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
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
Slide 20: Modernisation drive in India's defence forces
• 01 Opportunity Landscape Defence 02 •••• 03 04 05 06 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
Slide 21: Robust demand across product segments
•01 Opportunity Landscape Defence 02 •••• 03 04 05 06 Robust demand across product segments Market size per year by FY25 --------0-------- ~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
Slide 22: Transforming the world's 4th largest rail network
• 01 Opportunity Landscape Railways 02 •••• 03 04 05 06 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 st
Slide 23: Strategic Priorities
03 Strategic Priorities HFCL Limited | Investor Presentation 22
Slide 24: HFCL's accelerated growth strategy
HFCL’s accelerated growth strategy •• 01 02 Strategic Priorities 03 ••• 04 05 06 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 Imp
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 O
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 u
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% 59% Leading to 57% 41% • Access to new geographies • Uniform
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 De
Slide 29: Financial Drivers
04 Financial Drivers HFCL Limited | Investor Presentation 28
Slide 30: Q1FY23 Key Highlights - Consolidated
Q1FY23 Key Highlights - Consolidated ••• 01 02 03 Financial Drivers 04 •• 05 06 • HFCL and Wipro announced 5G product Total Revenue (INR crores) EBITDA (INR crores) & development partnership EBITDA Margin (%) PAT (INR crores) & PAT Margin (%) 1207 15.82% 7.54% 1051 • Received multiple orders from le
Slide 31: Q1FY23 Consolidated Income Statement
••• 01 02 03 Financial Drivers 04 •• 05 06 Q1FY23 Consolidated Income Statement Change Change Particulars (INR crores) Q1-FY23 Q4-FY22 Q1-FY22 Q-o-Q Y-o-Y Revenue from Operations 1,051 1,183 -11.16% 1,207 -12.92% Other Income 20 30 5 Total Income 1,071 1,213 -11.71% 1,212 -11.63% Total Expenses 941
Slide 32: Diversified Revenue Streams
••• 01 02 03 Financial Drivers 04 •• 05 06 Diversified Revenue Streams Exports Revenue Share (%) Revenue Share by Type of Customers (%) 18 51 59 68 82 8 5 3 49 41 32 18 FY20 FY21 FY22 Q1FY23 FY20 FY21 FY22 Q1FY23 ■ Government Private HFCL Limited | Investor Presentation 31
Slide 33: ESG
05 ESG HFCL Limited | Investor Presentation 32
Slide 34: 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 35: Committed to community welfare
01 02 03 04 ESG 05 06 Committed to community welfare Healthcare MMUs Running 5 Mobile Medical Clinics at different locations for providing Education PEHAL Contributing for smart classes projects in government Old age care SHEOWS Constructed women’s wing of old age home and • preventive healthcare fa
Slide 36: 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 OF
Slide 37: Appendix
06 Appendix \((Ll'l\\(tOIIII Rl a. '-<>l' ,.11,..u,, ''""""""'ll.l"U!c,thiu,1he,pcc11i,:dmm,n,um llicmllcnu.1t1<>r, d,.,o~ of1hc >mp.k ,lull""' o,·,-cJ tlJC n l..c-. ,:,~.,n ,n Ilic ,.,i.,,;,.nt •pc,;1fi<:a11on PMI.C \\ 110,,: ( ...11,. l'<rna<l<!,:,.-th.,n" •1n,mum!xnd,nl!r.stl 11 1> J': ---------:
Slide 38: Consolidated Profit & Loss Statement
••••• 01 02 03 04 05 Appendix 06 Consolidated Profit & Loss Statement Particulars (INR crore) 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% Depre
Slide 39: Consolidated Balance Sheet
••••• 01 02 03 04 05 Appendix 06 Consolidated Balance Sheet Equities & Liabilities Assets (INR crore) FY20 FY21 FY22 FY20 FY21 FY22 (INR crore) (A) Property plant & Equipment 437 443 465 (A) Share Capital 128 128 137 (B) Capital Work in Progress 15 12 47 (B) Other Equity 1,540 1,788 2,661 (C) Right-
Slide 40: 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 Jay
Slide 41: 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 Directo
Slide 42: Share price performance and shareholding pattern
••••• 01 02 03 04 05 Appendix 06 Share price performance and shareholding pattern Share Price Performance (Apr’22-June’22) Listed on BSE and NSE (Scrip code BSE: 500183 & NSE: HFCL) Shareholding Pattern Chart Title (as at 30th June 2022) 90 62000 80 60000 70 58000 60 56000 39.20% 50 54000 52.13% 40
Slide 43: 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 custom
Slide 44: 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 45: 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