[email protected]Regd. Office & Works: 8, Electronics Complex, Chambaghat, Solan-173213 (H.P.) Tel: (01792) 230644, 230645, 230647 Fax: (01792) 231902 Corporate Identity Number: L64200HP1987PLC007466 May 11, 2021 The BSE Ltd. 1 st Floor, New Trading Wing, Rotunda Building Phiroze Jeejeebhoy Towers, Dalal Street, Fort Mumbai – 400001 [email protected]Security Code No.: 500183 The National Stock Exchange of India Ltd. Exchange Plaza, 5 th Floor, C – 1, Block G Bandra – Kurla Complex, Bandra (E) Mumbai – 400051 [email protected]Security Code No.: HFCL RE: Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”). Subject: Earnings’ Presentation. Dear Sir(s)/ Madam, This is further to our earlier announcement dated May 10, 2021. In terms of Regulation 30 read with Para A of Part A of Schedule III to the SEBI Listing Regulations, we hereby submit a copy of the Earnings’ Presentation on, inter-alia, the Audited Financial Results of the Company for the 4 th Quarter and Financial Year ended March 31, 2021, both on Standalone and Consolidated basis, to be discussed during the Earnings’ Call scheduled to be held on Wednesday, May 12, 2021 at 11:00 a.m. It may be noted that the Board of Directors of the Company has, considered and approved the aforesaid Financial Results of the Company, in its meeting held on May 10, 2021. You are requested to take the above information on records and disseminate the same on your respective websites. Thanking you. Yours faithfully, For HFCL Limited (Formerly Himachal Futuristic Communications Limited) (Manoj Baid) Senior Vice-President (Corporate) & Company Secretary Encl: Earnings’ Presentation.
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Mahendra Nahata - Promoter & Managing Director• Bachelors in Commerce (Hons.) from St. Xavier's College, Kolkata• The pioneer of New Age Telecom Sector in India• Had been on the Board of Governors of IIT Mumbai and Madras and
IIIT, Allahabad• Served as President of Telecom Equipment Manufacturers Association
of India (TEMA)• Served as Co-chairman of Telecom Committee of Federation of Indian
Chamber of Commerce and Industry (FICCI)• Served as Chairman of Telecom Committee of PHD Chamber of
Commerce & Industry
Board Of Directors
Arvind Kharabanda - Non-Executive Director• A member of ICAI with vast experience across industries like Telecom,
Broadcasting, IT, Electronics, Consumer Durable and White Goods• Expert in Marketing, Manufacturing, Project Appraisal, Finance, Planning
and Corporate Strategy
Dr. R. M. Kastia - Non-Executive Director• Holds Doctorate degree in Chemistry. Fellow of British Institute of
Management (London)• Held Senior Executive positions with various reputed companies across
Industries
Ramakrishna Eda - Non-Executive Director - (Nominee – IDBI)• Masters In Science from Andhra University & MBA from Symbiosis Centre• Over 20 Years of experience in Corporate Banking in the Banking Industry
Bharat Pal Singh - Independent Director• MSc. in Operational Research from Delhi University • Masters in Marketing Management from Jamnalal Bajaj Institute of Management
Studies, Mumbai.• A Certified Financial planner with more than three decades of rich experience in
handling range of portfolios in Banking Sector • Former Dy. Managing Director of IDBI Bank• Had been on the board of several large companies as nominee of IDBI Bank
Surendra Singh Sirohi - Independent Director• Alumnus - IIT Kanpur and Ex-Officio Secretary to GOI in Ministry of
Communication & IT• Had been Member - Technology in Telecom Commission• Over 36 years vast experience in telecom industry particularly in the areas of National
Policy, Sectoral Regulations, Planning & Development, Corporate & Business Strategy, R&D,Project Management and management of Telecom Service Operations
• Instrumental in formulating several regulatory and strategic initiatives for inclusive growthin the telecom sector
Dr. Tamali Sen Gupta - Independent Director• Doctorate and Masters in Law from Stanford Law School, California• Over 32 years experience in the legal field and a specialist in transnational legal transactions
in media, real estate development, insurance and infrastructure.• Legal professional with vast experience in international JVs, collaboration and licensing
agreements, M&As• Advised Ministry of Railways on installing Fiber optic link
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Manufacturing Facilities
FRP Rods, IFGR, ARP Manufacturing Hosur, Tamil Nadu
Opportunity landscape in Optic Fiber / Optic Fiber Cables Segment
Continued Government investments in high-capacity networksto aid mass scale OFC demand – Evolution of 5G networks,Digital India, Bharat Net, Defence Communication, PM-WANI,Railways , Smart Cities
Dense fiberisation of Telecom Network across India to add fillipto OFC demand – estimated investment of INR 560 Bn
Growing demand for OFC from IT & telecom sector, risingnumber of mobile devices and surging number of data centres
FTTH connections estimated to grow from the current 4mn tonearly 50mn by 2024
OFC Export opportunity to multiply on account of globalmarkets realigning with China + 1 strategy
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Telecom
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Portfolio of Products – Telecom
Company has indigenously designed and developed Carrier Grade Wi-Fi systems, Unlicensed Band Radios (UBR) and Ethernet Switches and has already shipped 1.5 lakh units of Wi-Fi and UBR to leading telecom service providers in FY 20-21.
High Capacity radio RelayHCRR is a Line-of-Sight (LOS) radio link intended for use in a Tactical Network
Wi-Fi Access PointsIndoor and Outdoor Wi-Fi 5 and Wi-Fi 6 Access points for carrier,
enterprises and residential applications
Point to point and Point to multi point Backhaul radio
High speed point-to-point and point-to multi-point connectivity solutions in
unlicensed ISM bands.
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Telecom Projects under implementation
Reliance Jio 4G:
• HFCL is one of the largest telecom project service provider forReliance Jio and is currently engaged in rolling out of 4G OFC Networkservices across Northern India.
• FTTX Network: Deployed a Fiber-to-home network connecting approx.3.5mn home customers in 207 cities of Northern India.
Bharat Net: Under Bharat Net projects, HFCL has executed / is executing thefollowing projects :
• Punjab: Successfully completed deployment of ~8000 kms of OFCnetwork in Punjab and connected 3200 villages by GPON network
• Jharkhand: About 1800 villages will be connected by GPON networkwherein ~8000 kms of OFC network is being laid out
• Other states: Apart from deploying networks in Punjab & Jharkhand,HFCL is also supplying fiber optic cables in Maharashtra, Telangana &Chhattisgarh
5G technology is the next big upgrade for telecommunicationnetworks and HFCL is gearing up to offer various products, solutions& services for this segment
Capex required for 5G deployments on Pan India basis are likely toentail massive investments of ~INR 3650 Bn In next 5-6 years
Open Radio Access Network (OpenRAN) architecture enablenetwork operators to design and implement 4G and 5G networks bydifferent equipment from different vendors leading to hugeopportunities for the manufacturers
Under Bharat Net Phase II Project, Wi-Fi, infrastructure, electronicsand optic networks brings out an INR 40,000 crore opportunity
The disruptions caused by COVID-19 pandemic has increased thedemand for home and industrial IoT devices and applications
Production Linked Incentive(PLI Scheme) by the Govt. to incentivisethe indigenous telecom product manufacturers increases theprofitability and competitiveness
Opportunity landscape in the Telecom Segment
Defence
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Electronic Fuses for all types of artillery ammunitionElectronic Fuse are used in ammunitions to initiate an explosive function and to
detonate or release the bomb.
HFCL is the only Indian company to have developed the electronic fuses for artillery ammunition with own IPRs. Participated in a bid for supply of 5 Mn
fuses over 10 years which is under Technical evaluation.
Portfolio of Products – Defence
Electro Optical Devices (Night Vision Devices)Electro-optics devices are observation systems based
on Thermal Imaging technology and are used to make the weapon/surveillance platforms effective in
darkness and adverse weather conditions
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Defence Communication Projects under implementation
The defence budget allocation has been increased to includemodernisation of armed forces and replacement of older equipment andtechnologies. Defence Procurement Procedure has also been amendedto encourage participation by domestic players
India's defence electronics market is expected to grow to $70 billion innext 5 years. Policy measures will lead indigenous manufacturing ofElectronic Fuses, Electro Optical Devices, Radar, Electronic Warfare andcommunication equipment
Government target to reduce imports from 65% to 30% to providemassive opportunities for Indian manufacturers
The Defence Ministry has set a target of 70% self-reliance in weaponry by2027, creating huge prospects for industry players
Opportunity landscape in the Defence Segment
Railways
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Railway Communications
Projects under implementation :
• Currently implementing telecom networks for three greenfield domestic railway freight corridor projects awarded by L&T and Alstom
• Also executing two overseas projects of setting up telecommunication systems for Mauritius Metro and Dhaka Metro Rail
• Started implementing telecommunications systems for recently won contract of Kanpur Metro and Agra Metro Rail projects
O&M Services
Post deployment Network Operations and Maintenance Services
Solution Design
Designing solutions to meet customer requirements
Supply and I&C
Supply, Installation, Commissioning and Integration
Services
Business Development
Building on key strength of telecom networks of the group with target to become lead supplier for
communication system in Metro Rail and Main Line Rail Projects
The Indian Railways have announced major plans to overhaul thesignalling system by spending about INR 850 bn over next 5-6years and have invited private sector participation in:
Manufacture and supply of Telecom equipment and signallingsystem
Deployment of new rail lines with next generation system
Electronic equipment and sub-assemblies for rolling stock
Execution of turnkey projects in telecom and signalling
Opportunity landscape in Railways
Security & Surveillance
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Portfolio of Products & Solutions – Security & Surveillance
• HFCL provides customized and diversified solutions spanning across hardware and software, in line with “MAKE ININDIA” initiative.
• Focused on Border and Perimeter security, Smart City Solutions, City Surveillance, Traffic Enforcement, Critical Infrastructure Protection
• Company believes in developing Innovative Solutions as per customer requirement which are best in class yet cost competitive
Increased push from governments and law enforcementagencies continues to drive growth for surveillanceinfrastructure
Wider proliferation of AI (artificial intelligence) across thesurveillance touch points –cameras, control room, alarm –would drive demand for the nextgen surveillance products andsolutions
Perimeter intrusion detection & prevention systems market isestimated to reach ~USD 339 million by 2023, and grow at10.58% CAGR
Fresh allocation of ₹2,919 crore under Nirbhaya Fund for SafeCities program will further extend the reach to tier II cities
Opportunity landscape in Security & Surveillance
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Security & Surveillance Projects under implementation
HFCL has a vast experience of executing projects in Security and Surveillance domain in
areas such as Smart City and Safe City, Defence, Airports, Power plants,
Metro, Commercial spaces on time with complete customer
satisfaction.
Projects under execution
DefenceCCTV Surveillance, access
system, Fire detection at 300+ location of Indian
Army
RailTel Corp. of India Ltd.25,000 VMS at ~600 Railway
locations.
Projects Executed
Ludhiana Safe City 1,450 cameras with 30 days storage at Police lines Data
Centre
Jaipur Smart City Wi-Fi Access Points ,
Surveillance Cameras, Data Centre expansion
Other Projects Executed
Airport Authority
Noida Expressway
Gurgaon Safe City
Metro Rail: Dhaka & Mauritius
Strategic Overview
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Key Strengths
The most integrated ‘nextgen’ communication products and solutions provider
Pole positions in India - largest producer of Wi-Fisystems, UBRs and FTTH cables; largest marketshare in OFC supplies, largest delivery of defenceand public communication networks
Enviable portfolio and pipeline of innovative products through R&D. Accelerated scale up of technological capabilities – organic and R&D partnerships
Large scale manufacturing capacities backed by strong financials
The only Indian company to have developed electronic fuses for artillery ammunition with own IPRs and also selected for the development of Software Defined Radio (SDR) by Indian Army
Strong executable order book in hand
World class quality and cost competitive products suiting to customer’s requirement
Accelerated organisation-wide capability ramp up –talent, digitalisation, sustainable development and technological collaborations
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Empowering Innovation, Introducing New Technologies
• Team - Large pool of technocrats with proven track record havingInternational experience and business know-how Expertise :
• Design & Development including System Engineering and Product design,Hardware & Software development, Mechanical design and providing end toend solution for Telecom, Defence, Railways and Security & Surveillance.
• Integration - HFCL has joined hands with Qualcomm for development of itsWi-Fi 6 portfolio of products
Strategy
• Promote In-house R&D & Innovation
• Co-innovate with other R&D Houses
• In-organic growth by acquiring R&D Houses at early stage
• Vision to develop products which can be sold globally and can be benchmarked with other leading global manufacturers
• Focus on developing cost effective next generation products and solutionswith own IPR
Focus on Research and Development
Products Under Development
Uncooled Engine Core 12µm and 17µm
uncooled thermal core engine used in various
imagine applications like Security Cameras,
Weapon Sight, Handheld Thermal Imagine,
Firefighting, Process Monitoring, Automotive Safety, Thermography
Passive Optical Network Equipment
(PON) PON in its different
variants gives required bandwidth over FTTx
network
Ground Surveillance Radars
Short Range and Medium
Range RadarsCritical Installations
and border Surveillance. Examples:
Power Plants, Armed Forces, Para- Military
Small and Macro cell for 5G
Low-powered cellular radio access nodes to provide for
data capacity demands of a 5G
network
EO ProductsBinocular Thermal
Camera, PTZ Pan and Tilt Surveillance Thermal Camera & Thermal
Weapon Sight Critical application such as
Border Surveillance, Thermal Imagine Weapon
Sight for night fighting capability etc.
Software Defined RadiosLight weight, compact, easy to operate, rapidly deployable Line-of-Sight (LOS) radio operating in
the frequency band 4400 –5000MHz, intended for
use in a Tactical Network for long haul transmission
of data traffic.
Centralized/ Distributed Unit
Aggregation RouterAggregation routers
with high IP throughput and
advanced IP services to meet the transport
requirements of a 5Gmobile network
Investor Presentation | www.hfcl.com 28
Develop technology as a critical differentiator
Leverage cost competitive manufacturing across equipment, cable and accessory portfolio, integrate backwards to enhance margins and self-sufficiency
Target profitable turnkey projects to leverage on implementation capabilities
Make in India for the world, grow international footprints for products and solutions
Monetize invested capability buildup towards next frontier including 5G and defence manufacturing
Pursue profitable growth with margin-accretive revenues and cost-efficient operations
Create Stakeholders value
Growth Strategy
% % %
Create value added system integration capabilities in telecom sector
% % %
Financial Overview Q4-FY21 / FY21
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Q4-FY21 Key Highlights - Consolidated
• Completed 1.5 lakh units’ shipment of Wi-Fi productswithin first year of commencement of production
• Won contract for setting up entire telecommunicationsystems for Kanpur Metro and Agra Metro Rail
• Our subsidiary, HTL limited has diversified into wiringinterconnect solutions to cater to Aerospace & Defense,Automotive and Industrial markets
• Set up a model PM-Wani Village in Baslambi (Haryana),it will offer high speed broadband connectivity to theunconnected
• Established a new 5G business unit to develop richportfolio of next generation 5G compatible products &services
• Capacity utilization remained at optimal levels at allmanufacturing locations.
• Accelerated innovation for ensuring sustainable growth
PAT
INR 865 Mn894.3 % YoY
PAT Margins
6.22 %+491 Bps YoY
Diluted EPS
0.66 INR
Total Income
INR 13,979 Mn109.2 % YoY
EBITDA
INR 1878 Mn146.1% YoY
EBIDTA Margins
13.50%+ 200 Bps YoY
Q4-FY21 Financial Highlights (Consolidated)
Investor Presentation | www.hfcl.com 31
FY21 Key Highlights - Consolidated
• Order book remained intact with zero cancellations
• Launched and delivered 1.5 lakh units’ shipment ofWi-Fi products within first year of commencement ofproduction
• Commenced production of optical fiber cables for fiber-to-home (FTTH) applications from our Hyderabad facility
• Our subsidiary, HTL limited has diversified into wiringinterconnect solutions to cater to Aerospace & Defense,Automotive and Industrial markets
• Established a new 5G business unit to develop richportfolio of next generation 5G compatible products &services
• Accelerated innovation for ensuring sustainable growth
• 20% of the Promoters Holding was released from pledge
No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Suchinformation and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward lookingstatements" based on the currently held beliefs and assumptions of the management of HFCL Limited, which are expressed in good faith and in their opinion reasonable, including those relating to the Company’s generalbusiness plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment.Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of the Company or industry results to differmaterially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments in the Company’s business, its competitiveenvironment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation arecautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not constitute an offer orinvitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract orcommitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemptionfrom registration there from.
This presentation is confidential and may not be copied or disseminated, in whole or in part, and in any manner.
Valorem Advisors Disclaimer:
Valorem Advisors is an Independent Investor Relations Management Service company. This Presentation has been prepared by Valorem Advisors based on information and data which the Company considers reliable, butValorem Advisors and the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents ofthis Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation isexpressly excluded.Valorem Advisors also hereby certifies that the directors or employees of Valorem Advisors do not own any stock in personal or company capacity of the Company under review.
Mr. Manoj Baid/ Mr. Amit AgarwalHFCL LimitedTel: +91-11-30886529Email: [email protected]
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For further details, please feel free to contact our Investor Relations Representatives:
Mr. Anuj SonpalValorem AdvisorsTel: +91-22-49039500Email: [email protected]