The share price of HFCL zoomed over 12 percent on Tuesday after the company's net profit jumped 14-fold in the March quarter. The company's net profit rose to Rs 84.67 crore in Q4 as against Rs 5.78 crore in the year-ago quarter.

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The company's consolidated sales revenues also more than doubled, up 110 percent to Rs 1,391.40 crore in Q4 versus Rs 663.19 crore in the same quarter last year.

The surge was also on the back of low base in the March 2020 quarter due to the pandemic.

The stock rose as much as 12.6 percent to its day's high of Rs 38.65 per share on the BSE.

The company said that with the current order book of Rs 6,875 crore, it has firmed up its 5G plans and added that it saw solid traction across both its key verticals - telecom products and turnkey contracts & services in the quarter under review.

Net profit margins for the firm improved from 0.87 percent in last year's quarter to 6.09 percent in the current quarter. However, the net margins were marginally lower on a sequential basis compared to 6.44 percent in December 2020 quarter.

The Board of Directors has also recommended a dividend of Re 0.15/- at 15 percent per equity share of face value of Re 1 each, for the financial year 2020-21.

The company is a leading technology enterprise engaged in the manufacturing of high-end transmission and access equipment, optical fiber, optical fiber cables (OFC) and is specialised in setting up a modern communication network for telecom service providers, railways, defence, smart city and surveillance projects.

The company attributed growth mainly to its in-house designed and developed products, in line with the Atmanirbhar Bharat (self-reliant India) which it said would continue to add to its overall profitability.

Mahendra Nahata, the managing director of the company, said, “Our R&D efforts for constant innovation, fortitude to pursue growth even amid the challenges of the Covid-19 pandemic and faith of our customers have been core drivers to our success. We have a strong order book of Rs 6,875 crore with an attractive pipeline ahead."

Analysts at Ventura Securities said that the Company’s outlook is very optimistic given the increasing demand for optical fiber cables and Telecom Equipment, not only in India but also from overseas market as the shift to the digital economy has accelerated globally. Apart, from this, the Company’s defence equipment initiative will contribute to the government's emphasis on Make in India Program.

"The Government’s policies such as PLI for the telecom sector and

boost to Make in India program will provide strong tailwinds to domestic telecom equipment manufacturing. The Company sees India as the next innovation and manufacturing hub for telecom products and HFCL is fully prepared to serve the needs of its customers in India and abroad,” they added.

First Published:May 11, 2021 12:34 PM IST