HFCL: T For Telecom

Home grown telecom gear maker Himachal Futuristic Communications (HFCL) is ranked 3rd in this year’s BW Businessworld’s Fastest Growing Companies in the Rs 1,000 crore-4,999 crore (revenue) category.

The New Delhi-headquartered company has come a long way from an annual revenue of Rs 261 crore in FY 2012 and recording a revenue of Rs 2,570 crore with net profit of Rs 119 crore in FY 2016. The accelerated progress of these four years is reflected in the company’s revenue and net profit growing at a CAGR of 78 per cent and 80 per cent, respectively.

HFCL specialises in providing custom solutions in the telecom infrastructure space. Its telecom products revenue has grown 15 times while the turnkey contract revenue grew by nine times in the last four years. Meanwhile, HFCL has successfully added dedicated business divisions for Railways and Defence in 2016.

The electronic security and surveillance, an important feature for smart cities, offers another area of significant growth for HFCL. To make use of this opportunity, the company has raised their stake in Polixel Security Systems to 94 per cent. This entity provides integrated security and surveillance solutions/systems including CCTVs, traffic management and enforcement, access control, fire alarm and intelligent building management.

Talk about achievements and HFCL clearly stands out in efficiency. The company’s participation in four sizeable tenders aggregating to about Rs 5,000 crore in 2015 and 2016 has culminated in awarding of one advance order of Rs 1,245 crore and emergence as the lowest bidder in another tender of about Rs 2,500 crore.

On the companys website, HFCL’s MD, Mahendra Nahata, writes that the company made good progress across all their key objectives as set out in 2016. Turnkey and optic fibre cable (OFC) businesses have contributed to their growth while they made encouraging progress in their newly added business dimensions of Railways and Defence.

Government’s initiatives such as railway modernisation, defence self-sufficiency, digital security, Make in India, smart cities, etc., have helped accelerate HFCL’s growth. Due to extensive work in the telecom infrastructure space, HFCL has assimilated a knowledge base of constructing formidable telecom network across all kinds of topographies, a feature crucial to Indian geography, in particular.

Growing digitisation and increasing reach of telecom players in the hinterland has also encouraged HFCL to leverage its expanded capacity to grow the OFC business. The company has also expanded its OFC capacity at Goa facility in FY15 and expanded the OFC capacity of their subsidiary firm, HTL in 2016. The Chennai facility of HTL is fully operational today.

HFCL is planning to expand its telecom product bouquet beyond GSM equipment with potential addition of WiFi systems and optical broadband access equipment (FTTx). Telecom product and turnkey solutions segments are expected to continue to drive their growth in view of the government’s thrust on ‘Digital India’. Initiatives such as ‘BharatNet’ and ‘Rural Wireline Broadband Scheme’ will undoubtedly fuel the demand for OFC and network installations.

As an integrated telecom infrastructure player, HFCL delivers innovative, and competitively priced telecom solutions. Its technologically advanced solutions cover all aspects of the telecom value chain. In the recent times, HFCL is spreading its business spectrum by adding manufacturing of defence gears and turnkey installation of communication and signaling network for railways.

Moreover, the need for speed in data consumption will ensure continued investments in next generation infrastructure and networks by telecom service providers, which augurs well for HFCL.