HFCL shares: On February 21, HFCL Limited witnessed a notable surge in its shares, rising by over 3 percent to reach Rs 115, marking a new 52-week high during afternoon trading. This upward trajectory followed the company’s significant announcement of venturing into Europe strategically. HFCL revealed its plans to establish a manufacturing facility for optical fiber cables in Poland, signaling a deliberate expansion into the European market. This strategic move captured investors’ attention, contributing to the bullish momentum experienced by HFCL’s shares on the trading floor.
In a regulatory filing, the company stated that the establishment of the manufacturing facility in Poland would be facilitated by forming a new step-down subsidiary in Poland under HFCL B.VA subsidiary fully owned by the Company, with its headquarters situated in the Netherlands. This strategic move underscores the company’s meticulous approach to expanding its operational footprint in Europe, positioning itself to capitalize on the region’s market opportunities effectively. This development holds significant importance as it will empower the company to attract a notable increase in purchases from both existing and new customers. Additionally, it will strengthen HFCL’s foothold in Europe, with a strategic aim to elevate its export revenue share in the optical fiber cable (OFC) vertical from 30 percent to 70 percent within the next 4-5 years.
According to the company’s projections, the optical fiber cable (OFC) market in Europe is anticipated to witness a compound annual growth rate (CAGR) of approximately 4.5 percent over the next five years. By 2028, it is expected that the demand for optical fiber cables in the region will reach around 90 million fiber kilometers (fkm) per annum. This insight highlights the promising growth prospects that HFCL Limited aims to tap into by expanding its presence in Europe through the establishment of a manufacturing facility in Poland.
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The planned manufacturing facility in Poland is estimated to require an investment of Rs 144 crore and will commence operations with an initial production capacity of 3.25 million fiber kilometers (fkm) per year. This capacity is designed to be scalable, with the potential to increase production to 7 million fkm as demand grows.
“With Europe anticipated to maintain its status as a primary market for optical fiber cable,…”
Our expansion into Poland not only guarantees unhindered access to the burgeoning European market for communication but also enhances our ability to swiftly and effectively meet the rising demands for optical fiber cable from our customers, remarked Mahendra Nahata, the managing director of the company. As of 2:45 PM, the stock was trading at Rs 112 on the NSE, marking an increase of over one percent from the previous close. Since the beginning of the year, the share price has surged by more than 31 percent, showcasing significant growth.
