HFCL to expand presence in Europe, stock up 3%
Upstox
1 min read • Updated: February 21, 2024, 4:57 PM
Summary
Himachal Futuristic Communications Limited (HFCL), a key manufacturer of telecommunications equipment, has announced plans to expand its presence in Europe. The company has approved the setting up of a state-of-the-art optical fibre cable (OFC) manufacturing facility in Poland.
According to the exchange filing, HFCL has proposed a manufacturing facility in Poland with a capital outlay up to ₹144 crore. The facility will have an initial capacity of 3.25 million fibre kilometres (MFKM) per annum, which can be scaled up to 7 MFKM per annum.
The establishment of the manufacturing facility in Poland will be facilitated through the incorporation of a new step-down subsidiary in Poland under HFCL B.V., a wholly-owned subsidiary of the company in the Netherlands.
The demand for OFC in Europe to grow at a CAGR of 4.5% to 90 MFKM by 2028. The company wants to bolster its presence in Europe with a target to significantly increase its export revenue share in its OFC vertical revenue from 30% to 70% within the next 4-5 years.
On the earnings front, the company posted a weak performance on topline as well as bottomline. The revenue for the Q3FY24 saw a 4.9% year-on-year (YoY) drop, while net profits declined by 20% YoY in the same period.
Following the announcement, shares of HFCL closed 0.77% higher on Wednesday.