HFCL shares gain 5% to hit 52-week high; here’s why

Shares of HFCL rallied as much as 5% to hit a fresh 52-week high in intraday trade on Tuesday on the back of strong volume. The stock witnessed a surge in buying activity for the second straight session amid speculation that electric vehicle charger manufacturer Exicom Tele-Systems, in which HFCL holds a 7.74% stake, may launch an initial public offering (IPO) by the end of this month. The share price of the Gurugram-based technology company has gained over 20% in the last six sessions after it bagged an order worth ₹141 crore.

Early today, HFCL shares opened a tad higher at ₹107.80 against the previous closing price of ₹107.55 on the BSE. During the session, the stock gained as much as 5.3% to touch a new 52-week high of ₹113.25, with more than 50 lakh shares changing hands over the counter as compared to the two-week average volume of 38.03 lakh scrips. The market capitalisation stood at ₹15,516 crore at the time of reporting.

At the day’s high level, HFCL shares have more than doubled against its 52-week low of ₹55.75 touched on March 28, 2023. In the last one year, the stock has risen 61%, while it jumped nearly 62% in six months and 28% in the calendar year 2024. The counter added nearly 16% in a month.

As per the report, Exicom Tele-Systems plans to launch its IPO next week, comprising a fresh issue of ₹400 crore and an offer for sale (OFS) of 7,400,000 shares by existing investors, at a price band at around ₹140-145 per share. HFCL owns a 7.74% stake in Exicom Tele-Systems, while NextWave Communications and Vinsan Brothers hold a 71% and 14% shareholding in the company, respectively.

In another positive development, HFCL on February 13 informed exchanges that it secured a purchase order aggregating to ₹141 crore for the supply of indigenously designed and manufactured Unlicensed Band Radios (UBRs) and other associated services to Bharat Sanchar Nigam Limited (BSNL).

“This order is part of the advance purchase order worth ₹179 crore issued by BSNL to the company. The balance order of ₹38 crore is expected to be released on completion of supply against the current purchase order,” the filing noted.

As part of the contract, HFCl will offer products and services to BSNL crucial for supporting their 4G network. This network upgrade is poised to provide the latest technology yet cost-effective backhauling solutions for BSNL’s 4G network and lay the foundation for 5G capabilities. The scope of work under this purchase order includes initial planning, on-site surveys, the supply of telecom equipment, installation, testing, operations and annual maintenance among other services, the release highlighted.

For Q3 FY24, HFCL reported an 18.8% decline in profit after tax (PAT) at ₹82.43 crore as compared to ₹101.62 crore in the same period last year. The revenue fell 4.9% to ₹1,032.31 versus ₹1,085.84 crore in the corresponding period last year. On the operational front, EBITDA dipped 15.46% YoY to ₹163.45, while the margin dropped by 197 basis points to 15.83%. 

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