Shares of a telecom company gained 3.15 percent on Monday to reach an intraday high of ₹ 78.55 apiece on the National Stock Exchange (NSE) after it bagged orders to supply optical fiber cables to a telecom company.
According to an exchange filing, HFCL Ltd. along with its material subsidiary, HTL Ltd. has received the Purchase Orders aggregating to ₹ 82.60 crores for the supply of optical fiber cables to one of the domestic telecom service providers of the country. The contract is to be executed by November 2023.
HFCL is a diverse telecom infrastructure enabler with active interest spanning telecom infrastructure development, system integration, and manufacture and supply of high-end telecom equipment, optical fiber and optic fiber cable (OFC).
The company’s share price has risen by 385 percent in the past three years to deliver multibagger returns. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares three years ago, the value of their holdings would have been ₹ 4.85 lakhs today!
With a market capitalization of ₹ 10,874 crores, HFCL is a small-cap company. It has an ideal return on equity of 15.04 percent and an ideal debt-to-equity ratio of 0.25. Its shares were trading at a price-to-earnings ratio (P/E) of 34.28, which is higher than the industry P/E of 30.20, indicating that the stock might be overvalued, compared to its peers.
The company’s promoters hold a 50.28 percent stake in it, followed by promoters with 39.24 percent, foreign institutions with 7.53 percent, mutual funds with 2.60 percent and other domestic institutions with 0.35 percent.
Written by Simran Bafna
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