HFCL (HFCL) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue was INR 1,094 crores, down sequentially from INR 1,158 crores in Q1 FY25 and slightly lower than INR 1,111 crores in Q2 FY24; net profit after tax was INR 73 crores, up from INR 70 crores in Q2 FY24.

• Entered a strategic partnership with General Atomics Aeronautical Systems (GA-ASI) to develop UAV sub-systems, enhancing defense sector capabilities and export opportunities.

• Delivered advanced broadband network gateways for BSNL, supporting BharatNet expansion.

• Maintained steady performance despite global softness in optic fiber cable demand and monsoon-related execution delays; early signs of recovery with increased global enquiries.

• Focus on R&D, expanding product portfolio in telecom, defense, optical fiber cable, and passive connectivity solutions.

Financial highlights

• Q2 FY25 revenue: INR 1,094 crores; Q1 FY25: INR 1,158 crores; Q2 FY24: INR 1,111 crores.

• Q2 FY25 EBITDA: INR 172 crores; Q1 FY25: INR 185 crores; Q2 FY24: INR 150 crores.

• Q2 FY25 EBITDA margin: 15.71%; Q1 FY25: 16%; Q2 FY24: 13.47%.

• Q2 FY25 PAT: INR 73 crores; Q1 FY25: INR 111 crores; Q2 FY24: INR 70 crores.

• H1FY25 revenue reached INR 2,251.85 crores, up 6.89% year-over-year; H1FY25 EBITDA was INR 357.19 crores, up 15.45% year-over-year.

Outlook and guidance

• Management expects fiber optic cable market to recover from next quarter, with improved demand in India and internationally.

• Revenue target of INR 10,000 crores in three years, with 25%-30% growth expected; export revenue from optical fiber segment targeted at 70% of total in three years.

• Margin guidance for FY25 is to remain at H1 levels (~15.86%), with medium-term improvement expected from higher product revenue and backward integration.

• Deferred tax asset recognized on unabsorbed capital losses, indicating management's confidence in future taxable profits.