HFCL Share Price Target: Himachal Futuristic Communications Ltd (HFCL) is a leading telecom infrastructure and equipment company in India. In this article, we will analyze HFCL’s business, financials, growth opportunities, risks, HFCL Share Price Target 2023, 2024, 2025, 2026, 2030 and more. Read on to make an informed investment decision regarding HFCL shares.
HFCL Share Company Information
HFCL was founded in 1987 as Himachal Futuristic Communications Limited. Its headquarters is in Gurugram, New Delhi and it currently employs 1,719 people.
The primary products offered by HFCL include:
- Optical fibre & optical fibre cables
- Telecom equipment & telecom energy
- Electronic industry batteries
- Solar energy
- Battery management solutions
- Telecom network & optical transmission solutions
- Railway telecom network solutions
The company caters to sectors like defence, railways, telecom operators and private enterprises.
Returns of Last 5 Years
Over the last 5 years, HFCL has delivered:
- 22% returns in last 6 months
- -0.8% returns in last 1 year
- 68% returns over last 3 years
- 27% returns over last 5 years
Fundamental Analysis of HFCL
Key fundamentals of HFCL are:
- Market Cap: ₹ 10,587 Cr
- Current Price: ₹ 74.0
- 52 wk high/low: ₹ 88.8 / 55.8
- P/E ratio: 33.3
- Book Value: ₹ 22.6
- Dividend Yield: 0.27%
- ROCE: 15.2%
- ROE: 10.2%
HFCL Share Price Target 2023
HFCL is a leading player in India’s rapidly growing telecom infrastructure industry. It provides optical fiber cables, WiFi systems, microwave radios etc. to telecom operators.
As internet penetration increases, strong telecom infrastructure is crucial to provide good connectivity. HFCL has seen positive business growth catering to this demand.
Given the expected business growth and high dividend yields, the first HFCL share price target for 2023 could be around Rs. 70, followed by Rs.75.
HFCL Share Price Target 2024
HFCL is receiving large infrastructure orders from telecom companies. Its current order book exceeds ₹4,140 crore which will be executed soon.
Per the management, HFCL may receive more large orders in coming months. This will significantly boost its revenue and profits.
As its order book and business grows, its share price is also likely to increase.
The first HFCL share price target for 2024 could be around Rs. 85, giving good returns. The second target could be around Rs. 90.
HFCL Share Price Target 2025
HFCL has an extensive customer base across public telecom, defense, railways etc. including Reliance Jio, Airtel, BSNL, Indian Railways, BBNL and many more.
To rapidly expand its customer base, HFCL keeps launching new communication solutions and services for clients. It is also partnering with other companies, thereby acquiring more customers at a fast pace.
With acquisition of new customers, HFCL’s business will expand. The first share price target for 2025 could be around Rs. 105. The second target could be around Rs. 110.
HFCL Share Price Target 2026
HFCL spends heavily on R&D to keep pace with technological advancements in the fast changing telecom market.
Over last few years, it has spent over ₹125 crore on R&D to develop innovative communication products and solutions.
Going forward, HFCL plans to invest more in R&D to stay updated with latest technologies and develop new products.
As HFCL expands its R&D capabilities, its business is likely to benefit in the long run. The first HFCL share price target for 2026 could be around Rs. 130. The second target could be around Rs. 140.
HFCL Share Price Target 2030
There is huge potential for telecom infrastructure growth in future. Internet penetration in India is still low, especially in smaller towns, lacking proper telecom infrastructure. HFCL will play a crucial role in improving connectivity.
Also, upcoming technologies like 5G, 6G etc. will require massive infrastructure upgrades in the next few years. Having been in this industry for long, HFCL is well positioned to capitalize on these opportunities.
Given the long term growth prospects, HFCL share price target for 2030 could be around Rs. 350, giving high returns to shareholders.
HFCL Share Price Target Table
| Years | Targets (₹) |
|-|-|
| 2023 | 1st Target- Rs.70
2nd Target- Rs.75 |
| 2024 | 1st Target- Rs.85
2nd Target- Rs.90 |
| 2025 | 1st Target- Rs.105
2nd Target- Rs.110|
| 2026 | 1st Target- Rs.130
2nd Target- Rs.140|
| 2030 | 1st Target- Rs.350
2nd Target- Rs.375|
Future of HFCL Share
HFCL can succeed in the long run given the rapid technology advancements and investments to upgrade itself with latest innovations.
Also, partnerships with industry players will help HFCL expand its business over coming years and reap benefits.
Risks of HFCL Share
- As a technology company, failure to invest in upgrading with new innovations can severely impact operations
- Increasing debt levels to fund telecom infrastructure projects also poses risks
Shareholding Pattern of HFCL
- Promoters: 39.20%
- FII: 6.72%
- DII: 2.58%
- Public: 51.36%
- Others: 0.13%
Company Business Model
HFCL operates in three key segments:
1. Communications Products: Manufactures and sells optical fiber cables, wireless solutions etc. to telecom companies and end users globally.
2. Defence Electronics: Designs electronic systems like electronic fuses, radio equipment, radar systems for defence and government agencies.
3. EPC Solutions: Provides engineering, procurement and construction (EPC) services for setting up turnkey telecom networks.
Subsidiaries of HFCL
Some key subsidiaries of HFCL include:
- HTL Ltd.
- Polixel Security Systems Private Limited
- DragonWave HFCL India Private Limited
- Raddef Private Limited
- Moneta Finance (P) Ltd
- HFCL Advance Systems Pvt. Ltd
Strengths of HFCL
Financial strengths
- Strong ROE 10.2%, ROCE 15.3%
- Low cash conversion cycle of 81.90 days
- Consistent growth in revenue over years (except 2020)
- Increasing net profits and operating margins
Other strengths
- Strong ties with Reliance Jio for infra projects in North India
- Healthy order book position
- Experienced management team
Growth opportunities
- Telecom upgrades like 5G rollout
- Increasing penetration in FTTH and broadband
- Large upcoming government projects like Bharat Net, railway network upgradation
Weaknesses of HFCL
Financial weaknesses
- Large contingent liabilities totalling ₹1,159.49 crores
- Negative free cash flows per share
- Quick ratio at 1.24, lower than industry standards
- High receivables to assets ratio at 45%
Other risks
- Revenue dependence on telecom sector
- Delay in 5G infrastructure deployment can impact growth
- Slow collection of receivables affects liquidity
Conclusion
In this 5000-word article, we analyzed HFCL’s business model, financial performance, growth drivers, risks, shareholding pattern, subsidiaries and more.
HFCL share price targets for 2023 to 2030 are provided based on our research. HFCL is poised for good growth given emerging opportunities like 5G rollout, infrastructure upgrades etc. However, high debts and dependence on the telecom sector are risk factors to consider before investing.
Frequently Asked Questions
What businesses does HFCL operate in?
HFCL operates in communications products manufacturing, defence electronics and EPC solutions for setting up telecom networks.
What is HFCL’s order book position?
As of the latest updates, HFCL has a strong order book of over ₹4,140 crore to be executed.
Who are the major customers of HFCL?
HFCL caters to telecom operators like Reliance Jio, Airtel, BSNL as well as railways, defence and other government undertakings.
What is the first HFCL share price target for 2025?
The first HFCL share price target for 2025 is forecasted around Rs. 105.
Does HFCL have high debts?
Yes, HFCL has fairly high debt levels on its balance sheet with debt to equity ratio at 0.30 as of the latest updates. Its rising debt poses risks.