Dalal Street Investment Journal - - QUERYBOARD -

I bought 100 shares of Hi­machal Fu­tur­is­tic Com­mu­ni­ca­tions at ₹21.35 per share. Should I hold it? - Goteti Srini­vasarao

Hi­machal Fu­tur­is­tic Com­mu­ni­ca­tions op­er­ates as a tele­com in­fra­struc­ture en­abler. The com­pany’s oper­a­tions in­volve in­fra­struc­ture devel­op­ment, sys­tem in­te­gra­tion, and man­u­fac­ture and sup­ply of tele­com equip­ment and op­tic fi­bre cable (OFC). The com­pany’s seg­ments in­clude tele­com prod­ucts and turnkey con­tracts and ser­vices, among oth­ers. The com­pany’s turnkey in­built sys­tems are used for un­der­ground metro sta­tions, tun­nel cov­er­age, ho­tels, malls, gov­ern­ment of­fices and air­ports pro­vides pro­fes­sional en­gi­neer­ing ser­vices, in­clud­ing in­stal­la­tion and com­mis­sion­ing ser­vices, for the de­ploy­ment of the op­ti­cal transport net­work.

The com­pany of­fers a va­ri­ety of OFS, in­clud­ing aerial ca­bles, ar­moured ca­bles and mi­cro ca­bles. The com­pany’s tele­com equip­ments in­clude mi­crowave ra­dios, and elec­tron­ics, such as tele­com power, bat­tery man­age­ment and so­lar. Fur­ther, It also pro­vides so­lu­tions for tele­com net­works, such as in-build­ing, OFC and op­ti­cal trans­mis­sion; for rail­way’s tele­com net­work, as well as for cities.

On the fi­nan­cial front, Hi­machal Fu­tur­is­tic Com­mu­ni­ca­tions recorded a 62.94 per cent hike in its net sales to ₹903.71 crore for the first quar­ter of FY18 as against ₹554.62 crore in the first quar­ter of the pre­vi­ous year. How­ever, the PBIDT of the com­pany dropped 13.09 per cent to ₹54.05 crore in Q1FY18 as against ₹62.19 crore in the first quar­ter of FY17. The com­pany’s PAT also de­clined by 44.50 per cent to ₹25.63 crore in Q1FY18 as against ₹46.18 crore in Q1FY17. On an an­nual ba­sis, the com­pany’s net sales de­clined by 21.58 per cent to ₹2,241.44 crore in FY17 as against ₹2,858.37 crore in FY16. The com­pany’s PBIDT de­creased 44.20 per cent to ₹178.49 crore in the fis­cal year 2017 as against ₹319.86 crore in the pre­vi­ous fis­cal. The PAT of the com­pany de­clined 17.77 per cent to ₹123.72 crore in FY17 as com­pared to ₹150.45 crore in the pre­vi­ous fis­cal. The stock is on a growth mo­men­tum. We rec­om­mend the reader-in­vestors to HOLD the stock for the short term.

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