HFCL Limited shares on a roll! ICICI Securities initiates hedging
HFCL Limited shares were stuck in a 5 percent top channel after the company received an order in the amount of Rs 287.96 crore from RailTel Corporation of India Limited to set up a secure network optical packet switching for the defense forces. The stock has gained in the past three trading sessions and generated a return of 10.41% during the period.
“The secure packet-switched optical network will enhance application security and provide the latest cutting-edge technologies, which will meet the security requirements of the defense forces,” the company said.
The action ended up 4.98% at Rs79 on BSE. The company’s market capitalization reached Rs 10,185.56 crore. The share is above the 5-day, 10-day, 20-day, 50-day, 100-day, and 200-day moving averages. It has gained 351% in the past 12 months and is up 207 percent since the start of this year.
ICICI Securities initiated a hedge on the title. The brokerage believes that HFCL is well positioned to grow at a healthy pace given opportunities in the fiber optic cable / fiber optic, telecommunications and networking, defense, railways and security segments. and surveillance.
The company (formerly Himachal Futuristic Communications Limited) is a technology company specializing in the manufacture of high-end transmission and access equipment, optical fibers and optical fiber cables (OFC). It specializes in setting up a modern communication network for telecom service providers, railways, defense, smart cities and surveillance projects.
“We value HFCL at Rs 92 / share (13 x FY24E EV / EBITDA). over the next 2-3 years and the significant growth opportunity that we see are two main reasons for awarding the premium, ”said the brokerage.
“We also see a possibility of improving return ratios in the ensuing period. Export opportunities, if seized, may lead to further expansion of turnover in the years to come,” he added.
According to MarketsMojo, the company has reported positive results for the past three consecutive quarters and has a strong ability to service debt as the company has a low debt to EBITDA ratio of 1.18.
The security trades at a fair value compared to its historical average valuations and with a ROCE of 20.2, it enjoys an attractive valuation with an enterprise value of 4.2 on capital employed.