HFCL Ltd, the domestic telecom gear maker, reported its financial results for the third quarter of the fiscal year 2024, reflecting the challenges faced by the company. Net profit for the quarter ended December 31, 2024, fell by 10.35% year-on-year, amounting to ₹73.7 crore, compared to ₹82.2 crore during the same period last fiscal.
The company's revenue from operations witnessed a slight dip, declining 2% to ₹1,012 crore against ₹1,032.3 crore from the corresponding period of the previous year. Despite the decrease, HFCL's operational performance showed resilience as the operating EBITDA surged by 30%, reaching ₹151.8 crore compared to ₹116.8 crore the year before.
Mahendra Nahata, Managing Director of HFCL, addressed the financial downturn, stating, "Despite a dynamic and challenging market environment, HFCL has demonstrated resilience with a stable quarterly performance. The recent BharatNet order wins are a testimony to our expertise in strengthening India’s digital infrastructure, reinforcing our position as a trusted technology partner in the country’s broadband revolution.”
The EBITDA margin also improved markedly, standing at 15%, compared to 11.3% for the same quarter last year. This improvement indicates the company’s efficiency at managing costs even amid falling revenues.
Further illustrating HFCL's strategic direction, Nahata discussed the establishment of the new defense manufacturing unit located in Hosur, describing it as, "a significant milestone in our strategy toward self-reliance in defense technologies." This initiative not only aligns with the Indian government's Make in India and Atmanirbhar Bharat initiatives, but it is also seen as enhancing the company's capability to contribute effectively to national security.
Following the announcement of these results, shares of HFCL Ltd closed at ₹101.54, down ₹4.53, or 4.27%, on the Bombay Stock Exchange, reflecting investor reactions to the earnings performance.
Despite the quarter's results indicating some challenges, Mahendra Nahata remains optimistic about the future. He emphasized the need for the company to continue focusing on enhancing its technological capabilities, fostering innovation, and delivering value to stakeholders as it progresses through the fiscal year.
HFCL’s developments, especially with the BharatNet project aimed at improving digital connectivity across rural India, signify its pivotal role within the advancing telecommunications infrastructure. Analysts note the importance of such projects and the company’s involvement as they position HFCL strategically for future growth.
The completion of HFCL’s new defense manufacturing facility is also expected to bolster its product offerings and deepen its involvement with government contracts. This broader focus on diversifying its operational portfolio serves to mitigate risks associated with reliance on specific segments.
Overall, HFCL's third-quarter report highlights the complex interplay of market dynamics, financial performance, and strategic initiatives within India's growing telecom and defense sectors. Stakeholders remain cautious yet hopeful about HFCL's ability to navigate these challenges, as the company continues to push forward with innovation and expansion.