⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
HFCL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.9
| Stock Code | HFCL | Market Cap | 11,123 Cr. | Current Price | 72.7 ₹ | High / Low | 94.0 ₹ |
| Stock P/E | 4,120 | Book Value | 26.1 ₹ | Dividend Yield | 0.14 % | ROCE | 7.90 % |
| ROE | 5.00 % | Face Value | 1.00 ₹ | DMA 50 | 69.6 ₹ | DMA 200 | 75.0 ₹ |
| Chg in FII Hold | 0.00 % | Chg in DII Hold | -4.50 % | PAT Qtr | 56.2 Cr. | PAT Prev Qtr | 61.4 Cr. |
| RSI | 56.7 | MACD | 0.88 | Volume | 2,66,34,766 | Avg Vol 1Wk | 3,88,23,346 |
| Low price | 59.8 ₹ | High price | 94.0 ₹ | PEG Ratio | -352 | Debt to equity | 0.34 |
| 52w Index | 37.7 % | Qtr Profit Var | -28.4 % | EPS | 0.00 ₹ | Industry PE | 16.3 |
📊 Core Financials
- Quarterly PAT declined from ₹61.4 Cr. to ₹56.2 Cr. (~8% sequential drop, ~28.4% YoY decline).
- ROE: 5.0% → weak profitability.
- ROCE: 7.9% → low efficiency compared to peers.
- Debt-to-equity: 0.34 → moderate leverage, manageable but not negligible.
- Dividend Yield: 0.14% → minimal shareholder returns.
💹 Valuation Indicators
- P/E Ratio: 4,120 vs Industry PE 16.3 → distorted due to negligible EPS (₹0.00).
- P/B Ratio: 2.78 (Current Price ₹72.7 / Book Value ₹26.1) → moderately expensive relative to assets.
- PEG Ratio: -352 → negative, reflecting poor earnings growth.
- Intrinsic Value: Current price appears overvalued given weak fundamentals.
🏢 Business Model & Competitive Advantage
- HFCL operates in telecom infrastructure, optical fiber cables, and electronics manufacturing.
- Business model relies on government contracts and telecom sector demand.
- Competitive advantage limited; margins and profitability remain under pressure.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive only near ₹60–₹65 (close to 52-week low, RSI at 56.7 indicates neutral momentum).
- Long-Term Holding: Risky due to weak profitability and distorted valuations; suitable only for high-risk investors betting on telecom infrastructure growth.
✅ Positive
- Moderate debt-to-equity ratio (0.34) keeps financial risk manageable.
- Strong trading volumes indicate liquidity in the stock.
- Stable presence in telecom infrastructure and optical fiber sector.
⚠️ Limitation
- Extremely high P/E ratio (4,120) due to negligible EPS.
- Weak ROE and ROCE indicate poor capital efficiency.
- DII holdings decreased (-4.50%), showing reduced domestic institutional confidence.
📉 Company Negative News
- Quarterly PAT declined significantly (~28.4% YoY).
- EPS at ₹0.00 reflects weak earnings power.
- DII holdings reduced sharply, signaling lack of institutional support.
📈 Company Positive News
- Stock trading above 50 DMA (₹69.6), showing short-term strength.
- MACD at 0.88 indicates mild positive momentum.
🌐 Industry
- Telecom equipment industry PE at 16.3, far lower than HFCL’s distorted 4,120.
- Industry growth driven by 5G rollout, fiber optic expansion, and government infrastructure push.
🔎 Conclusion
- HFCL shows weak fundamentals with poor profitability and distorted valuations.
- Institutional confidence is declining, and earnings remain under pressure.
- Best strategy: Avoid fresh entry at current levels; consider accumulation only near ₹60–₹65 if betting on telecom infrastructure growth, with high-risk tolerance.