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Follow UsNot only did Himachal Futuristic
Communication Ltd (HFCL) more than double its sales in 1998-99, it also regained the once
shattered investors’ confidence. Its shares, which hovered around Rs 15 at the
beginning of the year, were selling at Rs 85 by the end of the fiscal—a gain of 462
percent, the highest for any telecom scrip.
Dr. RM Kastia
Year Of Start-up: 1987
Employees: 1100
Area Of Operation: Telecom infrastructure equipment, optical fibre
cables, turnkey projects
Address: 8, Commercial Complex, Masjid Moth, Greater Kailash - II,
New Delhi - 110 048
Tel.: 011-6412624/6471298
Fax: 011-6217784/6217156
Website: www.hfcl.com
At a total sales of Rs 392.11 crore, HFCL
registered a net profit of Rs 35.94 crore. While the sales grew by 116 percent, the
profits soared up by 154 percent. As forecasted by V&D 100 in 1997, the turnkey
division was instrumental in taking HFCL to its new heights. This division contributed the
lion’s share of 35 percent of the company’s turnover. Major turnkey orders
bagged by the company last year included those from Srinivas Cellcom and Essar
Comvision.
The other business that contributed a
significant amount to its kitty was the component trading business—about 29.5 percent
of the revenue. Telecom transmission equipmentaccounted for sales of Rs 48.72
crore, while
optical fibre cables contributed Rs 17.02 crore. The remaining turnover came from software
and services.
The company projects a turnover of Rs 600
crore in 1999-2000 and aims to double that figure by the year 2003. The growth strategy of
HFCL is a balanced mix of short-term priorities and long-term vision. As the national long
distance and private basic services in vacant circles see new players, a lot of investment
will go to backbone building, resulting in huge turnkey contracts being signed.
HFCL, with
solid experience and adequate manpower, hopes to make the most out of the opportunity.
However, the company rightly understands that to sustain growth in the long run, it has to
strengthen its equipment business. It believes that the only way it can strengthen that
business is through indigenous development of products. That explains the new thrust of
the company—R&D. In the next three years, HFCL hopes to get about 60-70 percent
of its revenue from its own-developed products. It has earmarked a sum of Rs 15 crore for
R&D in the current year. An R&D centre with 150 engineers has been set up in
Gurgaon, which will be supplemented by another R&D centre in Bangalore. Besides its
own development centres, HFCL is working with IIT Madras for design of CorDECT WILL
systems, DLC equipment, and Internet access server. It is also working with IIT Delhi for
development of advanced radio communications equipment.
The company is expected to continue doing
well in its turnkey business in the current year as well. Its equipment business is also
likely to garner revenues from sales of SDH equipment to the DoT, where in a recent
tender, it has quoted L2 prices. Industry sources say it might even bag an order from MTNL
Mumbai for CDMA handsets, for which it has a tie-up with Korean major Hyundai. But
HFCL’s dream of going global with its equipment sales will be realised only if it
manages to sell to the private operators here in India.
The direction at present seems just right.
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