Here's why HFCL shares tanked 9% today

Shares of HFCL Limited tanked 8.6 per cent to hit an intraday low of Rs 88.10 on the Bombay Stock Exchange (BSE) after the company announced its earnings for the quarter ended December 2021.
 
The domestic telecom gear maker posted 4.7 per cent decline in consolidated profit to Rs 81.1 crore for the third quarter ended December 31, 2021 mainly on account of a hike in component prices, especially semiconductors. 
 
The company had posted a profit after tax of Rs 85.11 crore in the same period a year ago. Revenue declined 4.86 per cent during the quarter to Rs 1,215.21 crore compared to Rs 1,277.48 crore it posted in the same quarter of 2020-21.
 
The stock opened 6 per cent lower at Rs 90.50 against the previous close of Rs 96.40. The market cap of the firm fell to Rs 12,306.66 crore. The shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
 
Commenting on the company’s performance, Mr. Mahendra Nahata, Managing Director, HFCL said, “Although the demand in the economy is coming back gradually, we had a strong quarter with growth in revenues.
 
"The margins during the quarter got slightly impacted followed by increased logistic costs and increase in fiber and semi-conductor prices. In order to expand capacities and build network solution capabilities to tap the upcoming opportunities in Telecom and Defence sectors, the company has raised Rs 600 crores via QIP and I am thankful to all the investors for their overwhelming support and faith posed in HFCL’s long term growth strategy," he said.
 
"We are also well on track to shift our revenue mix from more of EPC to more of products and looking for significant growth in coming years. The company is also constantly working on expanding its global market access and appointed global leaders in US and Europe to boost its OFC and Telecommunication product sales," he added.
 
He further added that “The Board has considered and approved the Company’s plan for expansion of Fiber manufacturing capacities from 10mn fkm p.a. to 22 mn fkm p.a. and consolidated OFC manufacturing capacities from 24.75 mn fkm p.a. to 34.75 mn fkm p.a. with an overall capital outlay of Rs 425 crores. We remain optimistic about the outlook of the sector. The Government’s approval for our PLI scheme candidature will help us in improving our competitiveness, collaborate with new players and venture into new geographies.”
 
According to MarketsMojo, the technical trend has improved from Mildly Bullish on January 5, 2022 and the stock is technically in a Bullish range now. It is trading at a discount compared to its average historical valuations and has a Fair valuation.