A strong inflow of orders and reduction in expenses helped HFCL to report a 20.5% quarter-on-quarter (q-o-q) increase in net profit to Rs 102 crore in the October-December quarter. The company’s revenue from operations, however, fell 7.5% q-o-q to Rs 1,086 crore owing to fall in services revenue.
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On a year-on-year basis, net profit rose 25.3%, whereas revenue from operations fell 10.7%. The company manufactures optic fibre cables and telecom equipment, and provides cloud-based network management systems.
“Over the last few quarters, despite supply chain disruptions… our strategy to tap into new geographies, new customers with new products and shift in revenue mix from projects to more of products … has resulted into sustainable revenue and margin expansion,” said Mahendra Nahata, managing director of HFCL.
Owing to fall in operating expenses, the company’s Ebitda margins expanded by 292 basis points sequentially to 17.8% in the December quarter. As of December-end, the company’s order book stood at over Rs 7,000 crore, higher than Rs 5,280 crore in the preceding quarter. The company has been witnessing strong demand for exports from Europe and West Asia.
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HFCL will also invest Rs 357 crore in the next two years to expand its capacity for optical fibre in Telangana to 24.96 million fibre km per annum (mfkm/pa) from 10 mfkm/pa, it said. The company is also a beneficiary of the PLI scheme for telecom equipment and committed an investment of Rs 425 crore over a period of four years for manufacturing of 5G radio equipment, routers, switches, WiFi products and backhaul radios.