With an order-book position of Rs 2500 crore and an enhanced exposure to IT,HFCL is clearly on the roll. The stock has seen a sharp spurt from Rs 900levels in February to over Rs 2700, hitting the upper circuit with amazingregularity. Although the stock has gained substantially, investments couldprove fruitful. The news that the company has signed two joint ventures withConsolidated Press Holding of Australia for e-commerce is sure to perk upthe scrip further.The first venture will focus on software services and the second onbusiness-to-business E-commerce as well as developing network infrastructureacross the country, including establishing payment gateways to support dataand E-commerce services. These forays will be in addition to HFCL's currentsoftware activities (focussed on telecommunications and hospitalmanagement). With orders amounting Rs 2500 crore (to be executed in the next6-24 months), HFCL should post a handsome growth in earnings.
For FY 2000, it is estimated that net profit would be around Rs 80 crorecompared with Rs 35.95 crore in the previous fiscal. This translates into anEPS of Rs 12.3, which is a vast improvement from Rs 5.56 crore last year. Inthe first nine-months of the current fiscal, HFCL has earned a net profit ofRs 54.88 crore. The recently completed private placement (at the upper priceband of Rs 1050 per share) will be used partly to pay of high-cost debts (ofRs 150 crore), which will benefit the bottomline in the next fiscal.
-- Nandita Datta
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