HFCL shares plunge after Q3 results. Stock levels to watch

The company’s consolidated revenue declined nearly 5% during the quarter under the review to ₹1,215 crore compared to ₹1,277 crore it posted in the same quarter of the last fiscal. HFCL’s EBITDA slipped marginally to ₹174 crore, while margins stood at 14.32% for the period under review.

“Although the demand in the economy is coming back gradually, we had a strong quarter with growth in revenues. The margins during the quarter got slightly impacted followed by increased logistic costs and increase in fiber and semiconductor prices,” HFCL Managing Director Mahendra Nahata said in a statement. 

The company during the quarter raised ₹600 crore through qualified institutional placement to expand capacities and build network solution capabilities to tap the upcoming opportunities in the telecom and defence sectors.

“As per the company, the margins during the Q3 got slightly impacted followed by increased logistic costs and increase in fiber and semiconductor prices. The stock is in profit booking zone right now as the results were not upto the expectations and may go upto 80 levels in near term,” said Ravi Singh, Vice President and Head of Research-Share India. 

HFCL is a leading manufacturer of optical fiber cables, optical transport, power electronics and broadband equipment for the telecommunication industry. HFCL shares have given multibagger return of over 204% in a year whereas the stock has surged 12% in six months period.

“Rising cost of semiconductor and logistics have impacted the margins. But the stock looks good in future as semiconductor problem solve,” said Ravi Singhal, Vice Chairman at GCL Securities.

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