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Last Updated on: 11 October, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo

HFCL Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: October 11, 2024, 12:11 am

Market Cap 19,984 Cr.
Current Price 139
High / Low171/61.5
Stock P/E53.8
Book Value 27.4
Dividend Yield0.14 %
ROCE13.3 %
ROE9.38 %
Face Value 1.00
PEG Ratio12.10

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for HFCL Ltd

Competitors of HFCL Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Industry Average0 Cr0000%0.59%0.49%0

All Competitor Stocks of HFCL Ltd

Quarterly Result

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales1,2771,3911,2071,1221,2151,1831,0511,1731,0861,4339951,1111,032
Expenses1,1131,2101,0219531,0451,0599359959171,279849979916
Operating Profit164181186169171124116179169154146133117
OPM %13%13%15%15%14%10%11%15%16%11%15%12%11%
Other Income12654-23013-42514131847
Interest44514940393838393738363537
Depreciation18181818202320212021212119
Profit before tax114118124115109937111413710910394108
Tax %25%27%27%25%26%27%25%26%26%28%26%25%24%
Net Profit858691868168538410279767082
EPS in Rs0.640.660.680.630.570.470.370.590.700.520.490.490.58

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales2616072,0192,5532,8722,1313,2274,7383,8394,4234,7274,7434,626
Expenses2555461,8642,2722,6001,9442,9444,3203,3463,8734,0774,1254,004
Operating Profit660156281273187283418493550650619621
OPM %2%10%8%11%10%9%9%9%13%12%14%13%13%
Other Income3497385110-292124402231374751
Interest8886444462626492115175166152146
Depreciation15172034262223274269788384
Profit before tax-6355476312156124220339358337442431443
Tax %-0%0%1%0%0%0%22%32%34%27%26%26%
Net Profit-6756475324156124172232237246326318326
EPS in Rs-0.540.453.832.611.260.991.351.731.771.862.272.182.20
Dividend Payout %0%0%0%0%0%0%4%6%0%8%8%9%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
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:21%
5 Years:52%
3 Years:21%
1 Year:89%
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

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Equity Capital124124124124124124127128128137138144
Reserves-254307537168401,0371,3061,5401,7882,6612,9423,808
Borrowings460401398544539469590734942783936991
Other Liabilities7317175727917739591,2711,4272,3581,5901,4571,544
Total Liabilities1,2901,6721,8472,1752,2752,5883,2943,8295,2165,1715,4736,487
Fixed Assets183230199175188196238504508528548652
CWIP22141210863436108268469
Investments3103132725750556058415570194
Other Assets7751,1281,3731,9432,0352,3272,9113,2334,6314,4804,5865,172
Total Assets1,2901,6721,8472,1752,2752,5883,2943,8295,2165,1715,4736,487

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity 5186129013620734172145205235-45
Cash from Investing Activity -6133-4537-25-30-150-167-165-458-44-449
Cash from Financing Activity -62-243-74-55-114-11667-725248-145454
Net Cash Flow-17-2410-18-361-49-15-546-40

Free Cash Flow

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Free Cash Flow6.00-400.00-245.00-117.00-271.00-352.00-186.00-172.00-241.00-392.00-133.00-317.00

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.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days2155152141202134113153215146145181
Inventory Days2673752591921405641966598113135
Days Payable637679320307260148134227262173131141
Cash Conversion Cycle-155-252-926814220221872127175
Working Capital Days12499313116510794136126135187231
ROCE %25%33%36%24%13%18%24%21%20%19%15%13%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthSep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Promoters41.89%39.23%39.23%39.20%39.20%39.24%39.24%39.24%37.84%37.84%37.69%37.63%
FIIs3.96%7.19%6.66%6.81%6.72%6.52%6.77%7.53%8.35%8.18%7.66%7.02%
DIIs0.63%1.44%1.87%2.03%2.58%2.64%2.78%2.95%4.64%4.55%5.68%7.39%
Public53.30%51.97%52.11%51.78%51.36%51.49%51.12%50.19%49.09%49.37%48.91%47.91%
Others0.22%0.17%0.12%0.18%0.13%0.12%0.10%0.09%0.08%0.08%0.06%0.06%
No. of Shareholders4,71,5785,43,5886,28,7526,36,0736,16,5626,14,9485,90,6925,85,6475,89,4826,51,7867,29,5367,70,791

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
Quant Small Cap Fund25,945,7801.78169.1725,945,7802024-10-100%
Quant Active Fund21,864,0512.35142.5525,945,7802024-10-10-15.73%
Quant Value Fund5,331,7244.5334.7625,945,7802024-10-10-79.45%
Quant Business Cycle Fund3,043,4783.0919.8425,945,7802024-10-10-88.27%
Quant Teck Fund2,277,6097.914.8525,945,7802024-10-10-91.22%
Nippon India Nifty Smallcap 250 Index Fund535,4030.493.4925,945,7802024-10-10-97.94%
Motilal Oswal Nifty Smallcap 250 Index Fund336,1500.482.1925,945,7802024-10-10-98.7%
Axis Nifty Smallcap 50 Index Fund248,6511.51.6225,945,7802024-10-10-99.04%
SBI Nifty Smallcap 250 Index Fund246,7030.481.6125,945,7802024-10-10-99.05%
Aditya Birla Sun Life Nifty Smallcap 50 Index Fund234,0061.521.5325,945,7802024-10-10-99.1%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue1.001.001.001.001.00
Basic EPS (Rs.)2.332.182.381.861.77
Diluted EPS (Rs.)2.332.182.381.861.76
Cash EPS (Rs.)2.902.912.942.452.18
Book Value[Excl.RevalReserv]/Share (Rs.)27.7722.8320.5014.9812.99
Book Value[Incl.RevalReserv]/Share (Rs.)27.7722.8320.5014.9812.99
Revenue From Operations / Share (Rs.)31.0134.4634.3834.4429.89
PBDIT / Share (Rs.)4.744.845.044.564.02
PBIT / Share (Rs.)4.174.234.474.033.69
PBT / Share (Rs.)3.153.133.212.622.80
Net Profit / Share (Rs.)2.342.312.371.921.86
NP After MI And SOA / Share (Rs.)2.292.192.281.861.77
PBDIT Margin (%)15.2714.0314.6513.2413.44
PBIT Margin (%)13.4412.2813.0011.6912.35
PBT Margin (%)10.149.089.347.619.36
Net Profit Margin (%)7.536.696.895.566.20
NP After MI And SOA Margin (%)7.386.346.625.405.91
Return on Networth / Equity (%)8.339.6911.1812.4713.61
Return on Capital Employeed (%)13.9517.5020.5323.1924.72
Return On Assets (%)5.085.496.054.585.93
Long Term Debt / Equity (X)0.040.030.040.140.13
Total Debt / Equity (X)0.240.240.260.440.41
Asset Turnover Ratio (%)0.740.890.850.931.02
Current Ratio (X)2.081.911.751.391.60
Quick Ratio (X)1.721.551.491.241.42
Inventory Turnover Ratio (X)2.521.471.841.511.46
Dividend Payout Ratio (NP) (%)0.008.246.170.006.81
Dividend Payout Ratio (CP) (%)0.006.454.940.005.75
Earning Retention Ratio (%)0.0091.7693.830.0093.19
Cash Earning Retention Ratio (%)0.0093.5595.060.0094.25
Interest Coverage Ratio (X)4.634.384.163.334.50
Interest Coverage Ratio (Post Tax) (X)3.293.093.002.423.08
Enterprise Value (Cr.)13919.728859.7411041.973794.401657.13
EV / Net Operating Revenue (X)3.121.872.340.850.43
EV / EBITDA (X)20.4113.3115.936.483.21
MarketCap / Net Operating Revenue (X)2.961.772.290.730.30
Retention Ratios (%)0.0091.7593.820.0093.18
Price / BV (X)3.352.703.871.690.69
Price / Net Operating Revenue (X)2.961.772.290.730.30
EarningsYield0.020.030.020.070.19

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of HFCL Ltd as of October 11, 2024 is: ₹138.47

Calculation basis:

  • 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.

As of October 11, 2024, HFCL Ltd is Overvalued by 0.38% compared to the current share price ₹139.00

Intrinsic Value of HFCL Ltd as of October 11, 2024 is: ₹144.63

Calculation basis:

  • Intrinsic 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.

As of October 11, 2024, HFCL Ltd is Undervalued by 4.05% compared to the current share price ₹139.00

Last 5 Year EPS CAGR: 4.45%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a high average ROCE of 21.75%, which is a positive sign.
  2. The company has higher reserves (1,483.00 cr) compared to borrowings (648.92 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (69.38 cr) and profit (279.23 cr) over the years.
  1. The stock has a high average Working Capital Days of 122.17, which may not be favorable.
  2. The stock has a high average Cash Conversion Cycle of 13.92, 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:
    1. Net Profit Margin: 7.53%
      • 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.
    2. ROCE: 13.95% (Industry Average ROCE: 0.59%)
      • 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.
    3. ROE%: 8.33% (Industry Average ROE: 0.49%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 3.29
      • 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.
    5. Quick Ratio: 1.72
      • 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.
    6. Stock P/E: 53.8 (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.
    7. 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.
INDUSTRYADDRESSCONTACT
Telecom Equipment8, Electronics Complex, Solan Himachal Pradesh 173213investor@hfcl.com
http://www.hfcl.com
Management
NamePosition Held
Mr. Mahendra NahataManaging Director
Dr. Ranjeet Mal KastiaNon Executive Director
Mr. Arvind KharabandaNon Executive Director
Mr. Ajai KumarIndependent Director
Mr. Surendra Singh SirohiIndependent Director
Mr. Bharat Pal SinghIndependent Director
Dr.(Ms.) Tamali SenguptaIndependent Director

FAQ

What is the latest fair value of HFCL Ltd?

The latest fair value of HFCL Ltd is ₹138.47.

What is the Market Cap of HFCL Ltd?

The Market Cap of HFCL Ltd is 19,984 Cr..

What is the current Stock Price of HFCL Ltd as on 11 October 2024?

The current stock price of HFCL Ltd as on 11 October 2024 is ₹139.

What is the High / Low of HFCL Ltd stocks in FY 2024?

In FY 2024, the High / Low of HFCL Ltd stocks is 171/61.5.

What is the Stock P/E of HFCL Ltd?

The Stock P/E of HFCL Ltd is 53.8.

What is the Book Value of HFCL Ltd?

The Book Value of HFCL Ltd is 27.4.

What is the Dividend Yield of HFCL Ltd?

The Dividend Yield of HFCL Ltd is 0.14 %.

What is the ROCE of HFCL Ltd?

The ROCE of HFCL Ltd is 13.3 %.

What is the ROE of HFCL Ltd?

The ROE of HFCL Ltd is 9.38 %.

What is the Face Value of HFCL Ltd?

The Face Value of HFCL Ltd is 1.00.

About the Author

Author Avatar
Getaka

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