Rs 6584 crore order book: This multibagger small-cap stock announced more than 40 per cent jump in net profit; do you own it?

The stock has witnessed significant buying activity as it has given multibagger returns of more than 440 per cent in just 3 years

HFCL is a leading technology company specializing in creating digital networks for telecom companies, enterprises and governments. On Thursday, shares of HFCL dipped by more than 2 per cent to trade at Rs 63.70 per share on BSE.

In Q1FY24, the revenue of the company dipped by 5.31 per cent from last year’s same quarter at Rs 995.19 crore. The EBITDA level of the company surged by 23.01 per cent from Q1FY23 at Rs 159.62 crore. The net profit of the company witnessed a significant surge by 43.10 per cent from corresponding quarter last year at Rs 75.56 crore. The order book of the company stands at Rs 6,584.71 crore.

During Q1FY24, HFCL achieved significant growth in revenues from international business, totaling Rs 176.23 crore, representing a remarkable YoY growth of 156 per cent. The company's strategy to prioritize increased revenue from products, along with expanding capacities and exploring new geographies, led to an increase in the product revenue share to 67 per cent in Q1FY24, compared to 59 per cent in the same quarter the previous year. Additionally, revenue from private customers also experienced notable growth over the past few quarters.

Commenting on the company's performance, Mahendra Nahata, the Managing Director of HFCL, expressed his views on the promising outlook of the Indian telecom industry despite the volatile global macroeconomic environment. He stated that the industry is expected to become one of the top 5G ecosystems worldwide.

Mahendra Nahata highlighted HFCL's sustained growth momentum, attributing it to their strategic initiatives. These initiatives focused on margin accretive products, shifting revenue mix from projects to products, backward and horizontal integration, capacity expansion, research & development, tapping new geographies, and expanding the customer base.

The company has entered into a significant partnership with Bharat Electronics Limited, India's largest defense PSU. The partnership spans over a two-year Memorandum of Understanding (MOU) with the aim of developing indigenous technologies for the Defense, Telecom, and Railway sectors.

Recognizing the strong demand for fiber from customers worldwide, HFCL has made a substantial upward revision to its optical fiber manufacturing capacity expansion plan, increasing it by approximately 300 per cent to 33.90 million fiber kilometers per annum. This expansion is expected to not only strengthen the company's margins but also ensure stability in the supply chain.

Additionally, Mahendra Nahata highlighted that the company is collaborating with Qualcomm to create open-source Wi-Fi 7 Access Points. These access points are also expected to be available in the current financial year, further enhancing HFCL's offerings in the market.

The stock has witnessed significant buying activity as it has given multibagger returns of more than 440 per cent in just 3 years. Keep a close eye on this trending stock.

Disclaimer: The article is for informational purposes only and not investment advice.