The telecommunications sector in India is a significant part of the economy, marked by rapid growth and innovation. This industry encompasses a range of services, including mobile and internet connectivity, and has been pivotal in driving the country’s digital transformation.
As of now, the sector is witnessing a shift towards 5G technology, which is expected to further enhance service offerings and customer engagement.
Listed below is one such microcap company that caters to the telecom sector:
Frog Cellsat Ltd
With a market capitalization of Rs. 481 crores, the shares of the leading manufacturer of radio frequency equipment started Friday’s trading session on a higher note at Rs. 312 compared to its previous close of Rs. 309.05.
Financials:
Looking at the company’s financial performance, the revenue decreased by around 19 percent from Rs. 44.50 crores during the March quarter to Rs. 35.94 crores in the June quarter. On the other hand, the net profits declined by 84 percent from Rs. 7.38 crores to Rs. 1.17 crores during the same timeframe.
Comparing the same metrics on a YoY basis, the revenue jumped by around 8 percent from Rs. 33.40 crores in Q1FY24 to Rs. 35.94 crores during Q1FY25. Contrastingly, the net profits declined by around 57 percent from Rs. 2.70 crores to Rs. 1.17 crores during the same timeframe.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 11.65 percent and a return on capital employed (RoCE) of 15.14 percent for the period spanning FY23-24. Further, the net profit margin during FY23-24 was 9.83 percent.
Order Book Growth:
The order book value of Rs. 810 million signifies a robust demand for Frog Cellsat’s products and services, indicating strong customer confidence and market traction. This marks a substantial increase from the previous order book, which was Rs. 650 million as of March 31, 2023
Management Guidance:
As per the annual report, the company aims to achieve a revenue target of Rs. 500 crore through new initiatives, particularly in interference mitigation solutions, EMS services, and products like Optical Network Units (ONUs).
Moreover, the ongoing capital expenditure (CAPEX) increase in the telecommunications sector presents an opportunity for Frog Cellsat to contribute significantly with its innovative offerings.
In FY 25, the company expects revenue to grow by 25 percent to 30 percent, fueled by efficient management of a growing order book and increased demand for enhanced network coverage services.
Additionally, EBITDA margins are projected to fall between 14 percent and 15 percent for FY25, benefiting from greater operational scale and associated efficiencies.
Frog Cellsat is actively involved in the Production Linked Incentive (PLI) scheme, focusing on manufacturing innovative products such as digital repeaters and antennas, which further supports its strategic goals and aligns with the “Make in India” initiative.
Further, the rising need for network coverage solutions in infrastructure projects like metros and airports presents Frog Cellsat with significant opportunities to demonstrate its expertise and broaden its customer base.
Product Range:
The company recently has introduced new products like the GPON ONT and Smart Repeaters for Smart Metering, targeting emerging market segments and enhancing our market reach.
Additionally, Frog Cellsat Ltd. specializes in manufacturing a range of products for both the defence and railway sectors, alongside their core telecommunications offerings.
In the defence domain, the company is involved in projects related to telecom Distributed Antenna Systems (DAS) that enhance communication capabilities for public safety and cellular networks, particularly in new infrastructure builds and modernization efforts.
For railway applications, Frog Cellsat offers a GSM-R Distributed Antenna System designed to ensure seamless communication within railway tunnels.
This system extends GSM-R signal coverage, facilitating uninterrupted communication between train drivers, railway staff, and control centres, thereby improving operational efficiency and emergency response capabilities.
Additionally, the company’s Cellular DAS products are applicable in various environments, including airports and tunnels, enhancing mobile network coverage and capacity.
Customer Base:
Frog Cellsat Ltd has successfully expanded its market presence by onboarding several strategic customers, including Jio, Tejas, ITI Limited, Indus, Crest, Adani, Bharat Electronics Ltd and others. Company Profile:
Incorporated in 2004, Frog Cellsat Ltd manufactures in-building coverage solutions and mobile network accessories for mobile service providers and operators. It also provides installations, repair and maintenance services.
Written By Vaibhav Patil
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