HFCL (HFCL) Q4 96/97 earnings summary

Executive summary

• FY 1996-97 performance weakened amid slow DoT procurement and delays in private operators’ launches; new tenders and turnkey contracts strengthened the order outlook.

• Strategy centered on expanding telecom products and services, upgrading technology, and increasing manufacturing capacity, including commercial production at the Goa optical fibre cable plant.

Financial highlights

• Sales, services and other income were Rs 21,118.86 lakh in FY 1996-97, versus Rs 26,006.89 lakh in FY 1995-96.

• Net profit was Rs 1,641.34 lakh, down from Rs 4,168.45 lakh; PBT was Rs 2,265.78 lakh versus Rs 4,387.44 lakh.

• Profit before depreciation, finance charges and tax was Rs 4,742.25 lakh, versus Rs 6,467.16 lakh; finance charges were Rs 1,904.56 lakh and depreciation Rs 571.90 lakh.

• Proposed equity dividend was 7%, absorbing Rs 452.53 lakh; preference dividends totaled Rs 69.39 lakh.

Outlook and guidance

• DoT equipment orders worth approximately Rs 165 crore were expected; turnkey orders from private service operators were approximately Rs 300 crore.

• SDH, digital microwave, FILL, HDSL and WILL products were positioned for growth; management expected efforts to begin bearing fruit from 1998.

• Expansion work was accelerated as business prospects improved, with additional infrastructure planned for use during the current production year.