HFCL Ltd: Intrinsic Value and Fundamental Analysis
Share Price and Basic Stock Data
Last Updated: September 16, 2024, 10:05 pm
Market Cap
21,552 Cr.
Current Price
150
High / Low
161/61.5
Stock P/E
58.0
Book Value
27.4
Dividend Yield
0.13 %
ROCE
13.3 %
ROE
9.38 %
Face Value
1.00
PEG Ratio
13.05
Stock P/E, Current Price, and Intrinsic Value Over Time
Competitors of HFCL Ltd
Stock Name
Market Cap
Current Price
High / Low
Stock P/E
Book Value
Dividend Yield
ROCE
ROE
Face Value
Industry Average
0 Cr
0
0
0
0%
0%
0%
0
Quarterly Result
Month
Dec 2020
Mar 2021
Jun 2021
Sep 2021
Dec 2021
Mar 2022
Jun 2022
Sep 2022
Dec 2022
Mar 2023
Jun 2023
Sep 2023
Dec 2023
Sales
1,277
1,391
1,207
1,122
1,215
1,183
1,051
1,173
1,086
1,433
995
1,111
1,032
Expenses
1,113
1,210
1,021
953
1,045
1,059
935
995
917
1,279
849
979
916
Operating Profit
164
181
186
169
171
124
116
179
169
154
146
133
117
OPM %
13%
13%
15%
15%
14%
10%
11%
15%
16%
11%
15%
12%
11%
Other Income
12
6
5
4
-2
30
13
-4
25
14
13
18
47
Interest
44
51
49
40
39
38
38
39
37
38
36
35
37
Depreciation
18
18
18
18
20
23
20
21
20
21
21
21
19
Profit before tax
114
118
124
115
109
93
71
114
137
109
103
94
108
Tax %
25%
27%
27%
25%
26%
27%
25%
26%
26%
28%
26%
25%
24%
Net Profit
85
86
91
86
81
68
53
84
102
79
76
70
82
EPS in Rs
0.64
0.66
0.68
0.63
0.57
0.47
0.37
0.59
0.70
0.52
0.49
0.49
0.58
Last Updated: Unknown
Quarterly Chart
Profit & Loss - Annual Report
Last Updated: Unknown
Month
Mar 2012
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
TTM
Sales
261
607
2,019
2,553
2,872
2,131
3,227
4,738
3,839
4,423
4,727
4,743
4,626
Expenses
255
546
1,864
2,272
2,600
1,944
2,944
4,320
3,346
3,873
4,077
4,125
4,004
Operating Profit
6
60
156
281
273
187
283
418
493
550
650
619
621
OPM %
2%
10%
8%
11%
10%
9%
9%
9%
13%
12%
14%
13%
13%
Other Income
34
97
385
110
-29
21
24
40
22
31
37
47
51
Interest
88
86
44
44
62
62
64
92
115
175
166
152
146
Depreciation
15
17
20
34
26
22
23
27
42
69
78
83
84
Profit before tax
-63
55
476
312
156
124
220
339
358
337
442
431
443
Tax %
-0%
0%
1%
0%
0%
0%
22%
32%
34%
27%
26%
26%
Net Profit
-67
56
475
324
156
124
172
232
237
246
326
318
326
EPS in Rs
-0.54
0.45
3.83
2.61
1.26
0.99
1.35
1.73
1.77
1.86
2.27
2.18
2.20
Dividend Payout %
0%
0%
0%
0%
0%
0%
4%
6%
0%
8%
8%
9%
Profit & Loss Yearly Chart
YoY Net Profit Growth
Year
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
2021-2022
2022-2023
YoY Net Profit Growth (%)
183.58%
748.21%
-31.79%
-51.85%
-20.51%
38.71%
34.88%
2.16%
3.80%
32.52%
-2.45%
Change in YoY Net Profit Growth (%)
0.00%
564.63%
-780.00%
-20.06%
31.34%
59.22%
-3.83%
-32.73%
1.64%
28.72%
-34.97%
HFCL Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2012-2013 to 2022-2023.
Growth
Compounded Sales Growth
10 Years:
8%
5 Years:
-1%
3 Years:
0%
TTM:
-1%
Compounded Profit Growth
10 Years:
4%
5 Years:
8%
3 Years:
11%
TTM:
17%
Stock Price CAGR
10 Years:
22%
5 Years:
51%
3 Years:
26%
1 Year:
105%
Return on Equity
10 Years:
15%
5 Years:
12%
3 Years:
11%
Last Year:
9%
Last Updated: Unknown
Balance Sheet
Last Updated: September 15, 2024, 3:32 pm
Month
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Mar 2024
Equity Capital
124
124
124
124
124
124
127
128
128
137
138
144
Reserves
-25
430
753
716
840
1,037
1,306
1,540
1,788
2,661
2,942
3,808
Borrowings
460
401
398
544
539
469
590
734
942
783
936
991
Other Liabilities
731
717
572
791
773
959
1,271
1,427
2,358
1,590
1,457
1,544
Total Liabilities
1,290
1,672
1,847
2,175
2,275
2,588
3,294
3,829
5,216
5,171
5,473
6,487
Fixed Assets
183
230
199
175
188
196
238
504
508
528
548
652
CWIP
22
1
4
1
2
10
86
34
36
108
268
469
Investments
310
313
272
57
50
55
60
58
41
55
70
194
Other Assets
775
1,128
1,373
1,943
2,035
2,327
2,911
3,233
4,631
4,480
4,586
5,172
Total Assets
1,290
1,672
1,847
2,175
2,275
2,588
3,294
3,829
5,216
5,171
5,473
6,487
Reserves and Borrowings Chart
Cash Flow
Month
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Mar 2024
Cash from Operating Activity
51
86
129
0
136
207
34
172
145
205
235
-45
Cash from Investing Activity
-6
133
-45
37
-25
-30
-150
-167
-165
-458
-44
-449
Cash from Financing Activity
-62
-243
-74
-55
-114
-116
67
-7
25
248
-145
454
Net Cash Flow
-17
-24
10
-18
-3
61
-49
-1
5
-5
46
-40
Free Cash Flow
Month
Mar 2012
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Free Cash Flow
6.00
-400.00
-245.00
-117.00
-271.00
-352.00
-186.00
-172.00
-241.00
-392.00
-133.00
-317.00
Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)
Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.
Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.
Overvalued: 0.30% compared to the current price ₹151.00
Intrinsic Value: 157.24
Calculation basis:
Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.
This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.
Undervalued: 4.13% compared to the current price ₹151.00
Last 5 Year EPS CAGR: 4.45%
*Investments are subject to market risks
Strength and Weakness
Strength
Weakness
The stock has a high average ROCE of 21.75%, which is a positive sign.
The company has higher reserves (1,483.00 cr) compared to borrowings (648.92 cr), indicating strong financial stability.
The company has shown consistent growth in sales (69.38 cr) and profit (279.23 cr) over the years.
The stock has a high average Working Capital Days of 122.17, which may not be favorable.
The stock has a high average Cash Conversion Cycle of 14.08, which may not be favorable.
Stock Analysis
Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in HFCL Ltd:
Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
ROE%: 8.33% (Industry Average ROE: 0%)
ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
Stock P/E: 58 (Industry average Stock P/E: 0)
Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
Total Debt / Equity: 0.24
Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions. Stock Rating:
About the Company - Qualitative Analysis
HFCL Ltd. is a Public Limited Listed company incorporated on 11/05/1987 and has its registered office in the State of Himachal Pradesh, India. Company’s Corporate Identification Number(CIN) is L64200HP1987PLC007466 and registration number is 007466. Currently Company is involved in the business activities of Construction/erection and maintenance of power, telecommunication and transmission lines. Company’s Total Operating Revenue is Rs. 4286.44 Cr. and Equity Capital is Rs. 137.49 Cr. for the Year ended 31/03/2022.
Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in HFCL Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE
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