Why HFCL Share Price is Rising

The BSE Sensex and NSE Nifty hit fresh all-time high levels in early trade on Wednesday amid a firm trend in global markets along with buying in stocks of IT companies.

In this rally, many stocks have shot up and one company that has seen a major rally is HFCL.

HFCL shares have climbed over 17% in the past five trading sessions.

Here's what is fuelling the rally.

#1 Venture into Surveillance Radar

HFCL, on 15 December, announced the development of new radar technology through its subsidiary.

Buoyed by the product innovation and development from its subsidiary Raddef, homegrown telecom gear maker HFCL has amplified its strategic focus towards radar technologies, aiming to significantly impact the defence sector.

HFCL, through its subsidiary Raddef, which is a 90% owned subsidiary, designed a range of surveillance radars that can be used to meet various operational needs.

Raddef is a R&D company that specialises in radars and RF solutions.

FMCW radars are versatile, with applications ranging from border security to weather forecasting and navigation systems.

Their ability to measure distance and velocity simultaneously makes them essential for various modern applications. These radars are designed to be portable and adaptable for use in diverse and challenging environments.

In addition, the company is also advancing in the development of drone detection radar, a crucial component in contemporary drone detection systems.

Its research extends to various radar technologies, including Doppler Weather Radars, Threat Emulators, LTE-based Passive Radars, Fog and Foliage Penetration Radars, Coastal Surveillance Radars, Avalanche Detection Radars, Altimeters, and more. These systems cater to the operational needs of different sectors and domains.

The global market for surveillance radars is projected to grow from US$ 6.9 billion (bn) (Rs 573.7bn) to US$ 12 bn by 2030.

India, accounting for 3.7% of global military spending, ranks as the third-highest military spender in the world, following the US and China. This positions HFCL for significant opportunities in the Indian defence tech space.

Aligned with the government's Make in India policy, HFCL aims to contribute to modernising the country's military capabilities through its indigenous defence tech innovations.

#2 Orders for Optical Fiber Cables

Apart from this, on 3 December 2023, the company bagged an order of around Rs 670 million (m) to supply optical fibre cables to a domestic telecom operator.

The company has to execute the order by April 2024 and expects growing demand for OFCs as India is on a significant digitisation drive with its national priorities. These are fiberisation under the BharatNet programme and the rollout of 4G and 5G networks by telcos.

The recent Cabinet approval for an additional Rs 1.4 trillion (tn) for the ambitious BharatNet project to provide rural broadband connectivity will further boost the demand for optical fibre cables.

The company recently announced expanding its optic fibre capacity and high-quality optical fibre cable capacity by March 2025.

What Next?

Going forward, the company is set to benefit from the anti-dumping move.

Last month, the central government questioned the Kerala government's approach towards using Chinese optical fibre.

It was then announced that anti-dumping duty on the import of optical fibre from these countries would be imposed.

This anti-dumping move is expected to help domestic companies increase their sales and get fair prices in the market.

Apart from that, the company is also somehow involved in the defence space. The Defence Ministry released the fifth positive indigenisation list in October 2023, comprising 98 items aimed at reducing defence imports.

Both public and private Indian companies are increasingly investing in defence technologies, such as drones, armoured vehicles, and rockets, signalling a concerted effort to enhance domestic capabilities in defence production.

With this growing support, top Indian defence companies like HFCL are sure to garner domestic government and export orders.

How HFCL Share Price Has Performed Recently

In the past five days, HFCL share price is up 17%. In the month gone by, the stock gained 18%.

In past three months the stock has gained 9%.

HFCL touched a 52-week high of Rs 83.1 on 20 December 2023 and it has a 52-week low of Rs 55.8 on 28 March 2023.

About HFCL

HFCL (formerly known as Himachal Futuristic Communications Limited) is a publicly listed telecom company incorporated in India.

It has been in operation since 1987 and is into various segments of manufacturing, research and development (R&D) and turnkey solutions.

Ever since its inception, the company has entered various streams of hardware integration in telecommunications.

The company's manufacturing facilities are located at Solan in Himachal Pradesh, Salcete in Goa, and New Delhi.

It is geared up for meeting the new generation access network demand in future.

For more details about the company, you can have a look at HFCL factsheet and quarterly results on our website.

You can also compare HFCL with its peers.

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