#1HFCL GROUP HFCL Limited 8, Commercial Complex, Masjid Moth, Greater Kailash - II, New Delhi - 110048, India Tel : (+91 11) 3520 9400, 3520 9500 Fax: (+91 11) 3520 9525 Web : www.hfcl.com Email [email protected] HFCL/SEC/23-24 February 02, 2024 The BSE Ltd. 1st Floor, New Trading Wing, Rotunda Building Phiroze Jeejeebhoy Towers, Dalal Street, Fort Mumbai 400001 - [email protected] Security Code No.: 500183 The National Stock Exchange of India Ltd. Exchange Plaza, 5th Floor, C - 1, Block G - Bandra Kurla Complex, Bandra (E) Mumbai-400051 [email protected] Security Code No.: HFCL RE: Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). Subject: Earnings' Presentation Dear Sir(s)/ Madam, In terms of Regulation 30 read with Para A of Part A of Schedule III to the SEBI Listing Regulations, we hereby submit a copy of the Earnings' Presentation on, inter-alia, the Un-audited Financial Results of the Company for the 3rd Quarter and Nine Months ended December 31, 2023, of the Financial Year 2023-24, both on Standalone and Consolidated basis, to be discussed during the Earnings' Call scheduled to be held on Friday, February 02, 2024 at 04:00 p.m. It may be noted that the Board of Directors of the Company has, considered and approved the aforesaid Financial Results of the Company, in its meeting held on February 01, 2024. We request to take the above information on your records and disseminate the same on your respective websites. Thanking you, Yours faithfully, For HFCL Limited Digitally signed MANO by MANOJ BAID Date: J BAID 2024.02.02 (Manoj Baid) 10:06:56+05'30' President & Company Secretary Encl: Earnings' Presentation Regd. Office & Works: 8, Electronics Complex, Chambaghat, Solan-173213 (H.P.) Tel: (01792) 230644, 230645, 230647 Fax: (01792) 231902 Corporate Identity Number: L64200HP1987PLC007466#2Jan 2024 Investor Presentation HFCL LIMITED HFCL#3CONTENTS 蛋 HFCL at a Glance x Strategic Priorities Opportunity Landscape Competitive Advantage ESG / CSR mil Financials ☑ Appendix#401 HFCL at a glance Presence in Key Industries Manufacturing Facilities across India Product Offerings Network Solution Offerings Research & Development Key Customers Order book#5HFCL - At a Glance A leading innovation - led technology enterprise Integrated communication products and Key Sectors solutions provider Innovative product offerings Comprehensive digital network solutions HFCL Limited | Investor Presentation Jan 2024 > Public Communication Defense 89% revenue contribution as on Q3 FY24 Largest market share in Optic Fibre Cable (OFC) supplies in India in FY22 and FY23 8% revenue contribution as on Q3 FY24 One of the largest manufacturers of Wi-Fi access points and Unlicensed band radios in India Railways 3% revenue contribution as on Q3 FY24 Leading technology company that offers end-to-end solutions establishing network required for defense communication in India#6Manufacturing Facilities across India 5 Operational Manufacturing facilities across India T 2 5 HFCL Limited | Investor Presentation Jan 2024 HILL HYDERABAD, TELANGANA 2 facilities • 5.2 mn fkm/annum Optic Fiber Cables 432k cable km/annum FTTH Cables 12 mn fkm/annum Optic Fiber production CHENNAI, TAMIL NADU (Through subsidiary company HTL Ltd) 11.88 mn fkm/annum Optic Fiber Cables 270k cable km/annum - FTTH Cables Passive connectivity solutions 4 HFCL . HOSUR, TAMIL NADU (Through subsidiary company HTL Ltd) 660kkm/annum Aramid Reinforced Plastic (ARP) Rods • 504k km/annum Fiber Reinforced Plastic (FRP) Rods • 2,700 MT/ annum Impregnated Glass Fiber Reinforcement (IGFR) . 24k MT/ annum Polymer Compound All above are raw materials for optical fibre cable VERNA, GOA 8 mn fkm/annum Optic Fiber Cables 50#7Product Offerings Telecommunication Defense Electronics Products Products Optic Fiber/ Optical Fibers Cables Passive Connectivity Solutions Aerospace & Automotive - Wire Harness Portfolio Products Under Development 1 3 5 Cloud 2 4 3 2 4 5 6 2 • Telecommunication 5G Macro Radio Unit Products (8T8R) 5G Indoor & Outdoor Small Cell (2T2R and 4T4R) Ultra High Capacity Point-to-point and Point- to-Multipoint UBRS Wi-Fi 7 Access Points 1. Point to Point and Point to Multipoint backhaul radio 2. Indoor & Outdoor Wi-Fi 5 and 6 Access Points 3. Cloud based Network management system 4. Ethernet L2/L3 Switches 5. Home Mesh Router 6. 5G Indoor & Outdoor FWA CPE 7. Cell Site Router/Access Router, Aggregation Router HFCL Limited | Investor Presentation Jan 2024 1. Thermal Weapon Sights (TWS) 2. Electronic Fuses 3. High capacity radio relay 4. VMS & Video Analytics 5. Ground Surveillance Radar 1. Optic Fiber 2. Armoured and Unarmoured Cable 3. Micro Cable 4. Micro Module Cable 5. Ribbon Cable 6. FTTH Cable 7. IBR Cable 1. Cable Assemblies 2. High Density Cabinets 3. Fiber Termination Box 4. PLC Splitters 5. Joint Closures 6. Aerial/ FTTH Accessories 1. Aerospace and Defense cable assemblies 2. Automotive and Industrial Parts Defense Communication & Electronics Software defined radio 6#8Network Solution Offerings 5G Public Telecommunication FG 4900 Defense Communication Railways Communication Optical Fiber Cable and Optical Transport Network Fiber Monitoring & Management System Deployment of comprehensive solutions for building of wireless and optical telecommunications networks including Optical Transport Network, Rural GSM Network, Fiber to the Home, In-building Solutions, Mobile Backhaul Networks. Internet Protocol Multi Protocol Label Switching Network HFCL Limited | Investor Presentation Jan 2024 3292 0000 Microwave Broadband Radio Leveraging our telecommunications network experience as well as comprehensive project management capabilities to create modern communication and signaling systems for Metros, Main-line railways and Freight corridors 7#9R&D backbone for futuristic Portfolio Establishment of 3 R&D centres in Bengaluru, Hyderabad and Gurugram. Focus areas include 5G innovation and Telecommunication products. Investing in technology, creating patent portfolio and indigenous R&D capability. Investing in development of various use cases for taking advantage of 5G technology such as 5G Lab as a service Strengthened in-house R&D team HFCL Limited | Investor Presentation Jan 2024 VXT BENCH Specialization 5G Business No. of people 121 Communication 102 Defence & Other 38 Technologies Optical Fibre Cable 40 Total 301 8#10Key R&D Partnerships Qualcomm wipro Licensing for Open source Wi-Fi 7 products; 5G millimeter wave FWA ; product development; 5G Outdoor Small Cell etc. Partnership for 5G Transport Products © BigCat® Wireless ΜΕΤΑΝΟΦΑ Capgemini engineering NXP Partnership for 5G Small Cells CommAgility VVDNⓇ TECHNOLOGIES Partnership for 5G Small Cells Design partner for Macro Radio, Wifi Access points, UBRs, Cloud management systems, Element management systems etc. Caprecomm DRIVE DEVICE EVOLUTION ipinfusion Z NIVETTI SYSTEMS Partnership for Switches BROADCOM® Partnership for Software Defined Radios Partnership for 5G Small Cells Partnership for 5G indoor small cells Partnership for Artificial Intelligence (AI) based Analytics Partnership for 5G Transport products Partnership for chip, access and aggregation routers, L2/L3 Switches HFCL Limited | Investor Presentation Jan 2024 9#11Key Customers Jio airtel freedom fibre METRO EXPRESS TATA ITI LIMITED (A Gavemment of India Undertaking) BBNL ADC vodafone sify MAYFLEX A Sonepar Company BSNL Connecting India Faster झारखण्ड सरकार OVERNMENT OF JHARKHAN ALSTOM सी. & आई. एल. LIQUID TELECOM scci alphatrack OPTUS Globe CORAL TELECOM HFCL Limited | Investor Presentation Jan 2024 المؤسسة العامة للخطوط الحديدية SAUDI RAILWAYS ORGANIZATION d faber EIL भारत इलेक्ट्रॉनिक्स BHARAT ELECTRONICS A Navratna Company AD रेलटेल RAILTEL हिन्दुस्तान पेट्रोलियम HP#12Order book ORDER BOOK CATEGORY WISE O&M, 2051 Products, 447 Network Services, 5180 Figures in INR crores HFCL Limited | Investor Presentation Jan 2024 5280 7678 7010 Q3FY23 FY23 Q3FY24 ORDER BOOK CUSTOMER WISE Private, 1945 Govt, 5733#13Opportunity Landscape Opportunity Landscape Global Opportunities - EU & UK Global Opportunities - US & Africa Global opportunities - 5G HFCL as a Global Provider Domestic Telecom Market Opportunities Significant OFC-related Project Opportunities Domestic 5G Market Opportunities Domestic Defense Market Opportunities Domestic Railway Market Opportunities 02 Market Opportunity at a Glance#14Opportunity Landscape Global HFCL Limited | Investor Presentation Jan 2024 How do We Plan to Grow? Domestic 13#15Global Opportunities – EU & UK Global HFCL Limited | Investor Presentation Jan 2024 EU UK Germany- Broadband allocation EUR 50 bn Italy- Broadband allocation EUR 3.8 bn France-Broadband allocation EUR 21 bn Austria- Broadband allocation EUR 2 bn Germany - BMVI Nationwide Gigabit Plan EUR 50 billion allocated for Fiber broadband deployments in Germany through 2025 to increase Fiber coverage from 5.4% of households to 50%. Of the total capital, EUR 12bn was committed by the federal government and rest from private capital sources.* Italy 1 Giga Plan EUR 3.8 bn, allocated with the goal of providing connectivity at download speeds of 1 gigabit per second and upload speeds of 200 megabits per second, in grey areas by 2026.* France - PFTHD (Plan France Très Haut Débit) EUR 21 billion capital (of which EUR 13 billion to EUR 14 billion from public investments) aimed at covering the entire France, including all homes, businesses, and government offices, with high-speed broadband by 2025.* Austria - Symmetric Gigabit The European Commission approved a EUR 2 billion aid scheme for Austria through the Recovery and Resilience Facility (RRF) to build passive infrastructure for fixed broadband access networks in areas with connectivity upto 100 Mbps Broadband allocation GBP 5 bn United Kingdom - Project Gigabit GBP 5 billion capital allocated by the UK government to build next-generation gigabit broadband for over one million hard- to-reach homes and businesses with 85% coverage by 2025 and 100% by 2030.* 14#16Global Opportunities - USA & AFRICA USA USA- Broadband allocation USD 97 bn USA Under different federal programs, US is expected to distribute USD 97 bn of funding broadband infrastructure over the next 4-5 years. Main programs are Broadband Equity, Access and Deployment (BEAD) program (USD 42.5 bn) to support states expand the high-speed broadband service network, American Rescue Plan (USD 25 bn) to invest in affordable high-speed internet and connectivity Global HFCL Limited | Investor Presentation Jan 2024 Africa Africa USD 100 bn Africa Less than a third of the population of Africa has access to broadband connectivity. As per World bank, Africa needs an investment of USD 100 bn by 2030 to provide universal, affordable, and quality broadband to all. Leading countries in Africa - South Africa, Nigeria, Ghana, Kenya, Ethiopia, Tanzania and others are attracting investments to expand the optical fiber network. 15#17Global Opportunities - 5G Impact/Opportunity capitalization Modernization requirement for transformation of transport network for 5G Addressable product segment 5G Transport products Portfolio under development Compliant to 3GPP Release 16 and based on open standards like ORAN (Open RAN) 5G RAN products CSPs embracing ORAN to unlock innovation, for rapid roll out of innovative 5G services, and for supply chain diversity 5G ORAN space has multiple vendors and CSPs need SI services to certify interoperability & deliver end-to-end public/private 5G networks Enterprises and industry verticals seek E2E services to realize automated operations with 5G enabled use-cases powered by Data, Analytics and Al System Integration (SI) Services ■ Cell Site Router DU (Distributed Unit) Aggregation Routers CU (Centralized Unit) Aggregation Routers 5G 8T8R/32T32R/64T64R Macro RU / mMIMO (Radio Unit) ■ 5G 2T2R/4T4R Indoor Small Cell for FR1 (Sub 6 GHz) and FR2 (Millimeter Wave) 5G 2T2R/4T4R Outdoor Small Cell for FR1 and FR2 ■ FWA CPE (Indoor and Outdoor for FR1 & FR2) ORAN Integration Solution Provider ■ Private 5G network for Enterprises ■ 5G enabled solutions for specific industry verticals like Manufacturing, Defense, Railways, Smart Cities, etc ■ Cloud based network management system Cumulative TAM (FY23-30)* -USD 87.3 Bn -USD 281.8 BD Bn -USD 245.1 Bn HFCL Limited | Investor Presentation Jan 2024 16#18HFCL as a Global Provider Our Global presence Exports Revenue Share 9MFY24 FY23 FY22 7.68 FY21 4.54 (IN %) 12.31 17.23 ■ Operations in 45+ countries and 100+ clients globally ■ Well established and long-term relations with domestic and foreign customers ■ Distribution contracts across North America and Europe. Established subsidiaries in USA and Netherlands to cater to global demand, expand business operations Incorporated step down wholly owned subsidiary Company of HFCL Limited in Canada. HFCL Limited | Investor Presentation Jan 2024 17#19Domestic Telecom Market Opportunities (Except 5G) Opportunity BharatNet Project Increased Domestic demand for OFC for dedicated Right of Way (ROW) along the greenfield highways Growth Driver* HFCL aided in deployment of Phase II which we believe makes us a preferred prospective partner for Phase III For FY24, the spending from the USOF is pegged at Rs 10,400 crore, over three times higher than the revised estimates for FY23. Currently, a major allocation of the USOF goes towards the BharatNet project The National Highway Authority of India (NHAI) is likely to spend USD 1.5-2.0 bn to develop dedicated Right of Way (ROW) for Optical Fibre Cable along the greenfield and brownfield highway over the next 3-4 years. ~USD 16.1 bn TAM across FY23-FY30 for OF/OFC and Accessories* Increased Fiber to the Home (FTTH) Demand Network Expansion by BSNL HFCL Limited | Investor Presentation Jan 2024 Increased adoption of FTTH Services and emphasis on Rural Broadband penetration seen as growth and margin expansion enablers The Government has approved the third revival package of USD 10.79 bn in June, 2023 as budgetary support towards spectrum. To boost the 4G and 5G infrastructure BSNL is expected to spend USD 1-2 bn each year over the next 4-5 years (around USD 6-8 bn). ~USD 18.2 bn TAM FY23-FY30 for Telecom Equipment * Source data: Feedback Advisory 18#20Significant OFC-related Project Opportunities National Broadband Mission Under National Broadband Mission as on 31 March 2023, • . Fiberization (lakh kms) cumulative, was 37.26 Lakhs kms with the target of 50 Lakhs kms by FY 2025; 7.6 Lakhs towers were installed with the target of 15 Lakhs towers by FY 2025 High Bandwidth Demand resulting into High Fiberization of Towers Newly launched 5G expected to increase bandwidth demand resulting into higher tower fiberization. It is expected that tower fiberization will cross 70% from the current level of 38.06% as of 31 March 2023, acting as a demand driver for Optical Fiber Cables (OFC Networks) and related solutions in the coming years BharatNet Phase III BharatNet is the world largest rural broadband project connecting 250,000-gram panchayats across the country. For BharatNet, we completed the deployment of 7843 Km of OFC Network in Punjab and 7,733 Km in Jharkhand in BharatNet Phase -II and has been pivotal in bringing broadband connectivity to 3,200 villages in Punjab and 1789 villages in Jharkhand. Under Bharatnet Phase III project, the tenders of approx. 6 lakh cable Kms have been floated by BSNL in 16 packages & remaining approx. 05 lakhs cable km shall be procured directly by the states. The value of present tender of BSNL is about 82,000 crores including capex and opex for 10 years. HFCL is eligible for all the 16 packages • • Government of India expected to invest USD 10-12 Bn each year towards boosting the telecom infrastructure over the next 4-5 years (around USD 50 Bn by FY30) Estimated spend of USD 1.5-2.0 bn for OFC spend along highways for next 3 to 4 years HFCL Limited | Investor Presentation Jan 2024 19#21Domestic Market Opportunities - 5G Opportunity Growth Drivers Portfolio under development Cumulative TAM (FY23-30)* Networking product Demand RAN product demand System Integration (SI) Service demand ■ 5G is expected to account for around 60 per cent of total mobile subscribers by FY2028 and 1,250 mn by FY 2030. Smartphone users are forecast to consume 65 GB of data per month on average by FY2030 Jio plans to install 5G in 100 million homes through FWA over the next 4- 5 years ■ Public Wi-Fi services will be offered nationwide through Public Data Offices (PDOSs) ■ Indian enterprises expected to increase on 5g use cases spend including smart manufacturing, immersive content and cloud gaming ■ Over 45 new data centres are expected to come up in India to increase the overall capacity by 1,000 MW by the end of 2025 ■ Cell Site Router DU (Distributed Unit) Aggregation Routers CU (Centralized Unit) Aggregation Routers 5G 8T8R/32T32R/64T64R Macro RU / mMIMO (Radio Unit) ■ 5G 2T2R/4T4R Indoor Small Cell for FR1 (Sub 6 GHz) and FR2 (Millimeter Wave) 5G 2T2R/4T4R Outdoor Small Cell for FR1 and FR2 ■ FWA CPE (Indoor and Outdoor for FR1 & FR2) ORAN Integration Solution Provider ■ Private 5G network for Enterprises 5G enabled solutions for specific industry verticals like Manufacturing, Defense, Railways, Smart Cities, etc. ■ Cloud based network management system ~USD 7.4 Bn ~USD 20.6 BD Bn -USD 18.6 Bn Br HFCL Limited | Investor Presentation Jan 2024 20 20#22Domestic Defense Market Opportunities Opportunity Efforts to Modernize Indian Defense networks and systems and provide a boost to local manufacturers Improved Market Expansion Opportunities ■ Growth Driver The Indian Defense capital expenditure was USD 19.0 Bn in FY 23 and is expected to reach USD 40.2 Bn by FY 30 ■ Record 75 per cent of the defence capital procurement budget has been earmarked for domestic industry in Financial Year (FY) 2023-24, up from 68 per cent in 2022-23. Import reduction from 65% by FY28 to 30% by FY32 on the back of initiatives like Aatmanirbhar Bharat, Make in India. ■ Government listed a total of 310 items to be produced indigenously The Government of India has liberalized FDI under an automatic route up to 74 per cent and up to 100 per cent through the Government route Cumulative TAM (FY23-30) -USD 2.8 Bn Electronic fuses -USD 30.6 BD Electro-Optics Bn -USD 1.00 Bn Software defined radio (SDR) HFCL Limited | Investor Presentation Jan 2024 21#23Domestic Railway Market Opportunities Projects Available* Cumulative TAM (FY23-30)* Dedicated Freight Corridors - Greenfield projects with 3 corridors Modernisation of signalling & telecommunication in Indian Railways ~35 global Metro Rail projects in execution, planning and proposed stage 8 RRTS projects proposed, 3 being considered for immediate implementation Growth Drivers & Overall Project Costs* 3 Dedicated Freight corridor projects with capital cost of USD 25 bn Automation of 15k kms rail signaling Train Collision Avoidance System 'KAVACH' to be installed on 37,000 km. An overall investment of INR 700 bn (USD 8.5 bn) was unveiled recently and is likely to be implemented over the next 5-7 years Overall Metro projects worth USD 40 bn spread over the next 2-10 years 2 in financial approval stage USD 0.85 BD Bn USD 0.97 Bn USD 3.0 Bn USD 0.4 BD Bn + P ectronics Unit HFCL Limited | Investor Presentation Jan 2024 Signal Post Balise 22 22 Axle Counter#24Market Opportunity at a Glance Cumulative FY 23-30 (USD Bn)* % CAGR FY 23-30 Telecom Products A) OFC/OFC Accessories B) 5G Products Networking Products Global 189.39 Domestic Global Domestic 16.10 ≈7.19% ≈11.30% 87.28 7.44 =47.24% =58.63% RAN Products 281.83 20.60 =38.50% =72.64% System Integration (SI) Service demand 245.06 18.57 23.11% =65.49% C) Telecom Equipment (Except 5G) 840.10 18.23 =8.86% =9.62% Defense Products Electronic Fuses Electro-Optics SDR Railway Communication 32.44 2.84 ≈16.52% 170.51 30.64 =7.57% =7.57% ≈14.04% 83.40 1.00 =8.45% 5.20 2.20 Takeaways - Opportunities for HFCL to capture larger share in a growing market HFCL Limited | Investor Presentation Jan 2024 23#2502 Strategic Priorities Strategic Priorities Expanding Product Portfolio Expanding Global Reach Increased Manufacturing Capabilities Focus on R&D Shift in Revenue Mix#26Strategic Priorities Expanding Product Portfolio Increased Manufacturing Capabilities and high-level backward integration Expanding Global Reach Focus on R&D HFCL Limited | Investor Presentation Jan 2024 Shift in Revenue Mix Improving Profitability and rationalizing Working Capital 25#27Expanding Product Portfolio Significant investments for new product developments including Wi-Fi-7 enabled access points, radio access and transport products. These products will be compatible with 5G networks. Fresh initiatives to develop new types of optical Fiber cables for exports, alongside ensuring high level of backward integration Thermal weapon sights and ground surveillance radars already developed and development of software-defined radios is under progress HFCL Limited | Investor Presentation Jan 2024 TIME FUZE 26#28Expanding Global Reach Exports constitute 12.31 % of total revenue in 9MFY24 and has grown at a CAGR of 88.02% in last three financial years Establishing subsidiaries and branch offices across the Globe and also appointing distributors and channel partners targeting incremental product demand globally and business expansion Focused on new geographies, especially Europe, North America and Africa as a focused potential market CAR MATRICE HFCL Limited | Investor Presentation Jan 2024 HFCL GROUP OPTICAL FIBRE CABLES 27#29Expanding Manufacturing Capabilities Planned expansion of manufacturing capacity of Optical fibre Planned Optical Fibre Cable capacity expansion 12 (IN mn fkm p.a) 33.90 Current Capacity Proposed Capacity Further strengthening of backward integration • • Reduce dependence on external suppliers for manufacturing of Optical Fiber Cables Higher Quality Assurance of finished goods Yield better margins HFCL Limited | Investor Presentation Jan 2024 25 (IN mn fkm p.a) 35 Current Capacity Proposed Capacity Setting up of new facility in NCR region for the manufacture of Telecom and Networking products HFCL Cumulative TAM of ~550 bn USD both globally and in India by FY28. Targeting revenue of Rs. 800 - Rs. 1000 crores in FY24-25 compared to Rs. 122 crores as on Dec'23 from existing product portfolio. • Eligible for På benefits by manufacturing these products 28#30Shift in Revenue Mix Increased business from Private Entities in alignment with market demand Increased focus on Export-led revenue generation by leveraging on global demand Shift from Project-led revenue to Product-led revenue - Increase in product revenue will facilitate lower working capital, quicker realization and margin expansion Increasing revenue share from Private Customers* (IN %) Exports Revenue Share (IN %) Shift towards Product-led Revenue (IN %) 51% 68% 83% 73% 12.31 17.23 ויוו ו.. 7.68 4.54 49% 32% 17% 27% 27% 43% 56% 48% FY21 FY22 FY23 9MFY24 FY21 FY22 FY23 9MFY24 FY21 FY22 FY23 9MFY24 Government Private Product-led Revenue Project-led Revenue HFCL Limited | Investor Presentation Jan 2024 29#31O Q O 0. 00 00060 900 0000 9000000 00000 000000000 03 0 0 0: 000000 00:000 000000 0 0 0 Competitive Advantage#32Why is HFCL Preferred? (1/2) Market Leader One of the largest manufacturers of Optical Fiber Cable in India One of the largest manufacturers of Wifi Access points and UBR along with other telecom products in India Long term customer relationship Partner for Reliance Jio in North India for rolling out of backbone and In-House R&D Tech centric R&D driven company 301 strong R&D team as of 30th Dec 2023 ■ backhaul of OFC and FTTH network 3 R&D centres at Bengaluru, Hyderabad and Gurugram " R&D partnership with reputed companies 5G product portfolio developed inhouse Integrated Manufacturing Manufacturing key products under one roof End to End Network Provider Proven capabilities under same roof for " Optical Fiber Cable " Optic Fiber " FTTH cables FRP Rods/ARP Rods/IGFR Yarns Polymer Compound Passive Connectivity Solution Products Telecom and Networking Products manufacturing currently through OEM Partners ☐ Executing concept to completion of projects ☐ Delivering products Aiming to be at the forefront of Global Technological revolution through innovation HFCL Limited | Investor Presentation Jan 2024 31#33Why is HFCL Preferred? (2/2) [200] Backward Integration Key raw materials produced inhouse thereby acting as higher margin drivers ☐ Optical Fiber ☐ Polymer Compound ☐ FRP Rods/ ARP Rods/ IGFR Yarns Healthy Financials Debt: Equity Ratio of 0.26x Signifies Low credit risk and comfortable capital structure Strong Order Book Strong Order Book of 7678 crores diversified across Telecom, Defense and Railways ■ Providing revenue visibility for the medium term Global Focus Exports revenue share stands at 12.31% in 9MFY24 Established subsidiaries in USA and Netherlands for marketing its products globally Incorporated step down wholly owned subsidiary Company of HFCL Limited in Canada. HFCL Limited | Investor Presentation Jan 2024 Building the Network Highway to power Indian and global communication infrastructure 32 32#3404 Enviornment Social Governance ESG CSR#35Roadmap for Environment Sustainability HFCL's management has developed a clear roadmap with targeted initiatives for various manufacturing facilities to reduce the Company's environmental footprint and boost savings. Facility Location Hyderabad Goa Chennai and Hosur (HTL Limited, HFCL's subsidiary) Sustainability Initiatives Installation of a 1 MW solar system set to be operational by FY25 Shifting from conventional microwave lamps to LED UV lamps starting by March. 2024 Zero-waste landfilling through responsible waste management Transition to solar energy with 40% of total energy consumption from this source Transition to solar-wind hybrid model of 10 MW capacity to accelerate renewable energy integration from 80% to 90% by FY25 Expected Outcomes Saving of 1.5 million units of energy per annum Reduction of 1,215 metric tonnes of emissions Emission reduction by 5,022 metric tonnes each year Saving of 6.2 million units of energy per year Waste reduction and potential to reduce carbon dioxide emissions up to 124 metric tonnes in FY24 Expected carbon dioxide emission reduction of up to 3,240 metric tonnes Expected emission reduction of up to 14,580 metric tonnes HFCL Limited | Investor Presentation Jan 2024#36ESG as a Prime Directive Reduced Energy Consumption Replacement of conventional lighting by LED across facilities and offices Sustainable manufacturing through initiatives such as installation of high efficiency compressed air suction devices reducing noise and usage of compressed air Improved Waste Management Partnership with Greentek Reman for e- waste management Sustainable Packaging ■ Utilization of corrugated paper sheet instead of plastic during the process of packaging and reengineering of packaging drums to save wood and fuel Paperless data recording in Optical Fiber and Cables testing, recording being directly from the test equipment to the PC via software. Improved Water Management ■ Continuous water recycling in both Goa and Hyderabad manufacturing facilities through an efficient recycling process, reducing freshwater consumption. ■ 35 KL/day and 30 KL/day Sewage Treatment Plants (STP) for recycling wastewater for gardening purposes both at Hyderabad and Goa Plant respectively. ■ Constructed a rainwater harvesting system and a green landscape at Hyderabad. HFCL Limited | Investor Presentation Jan 2024 35#37CSR: Giving Back to Society Healthcare Aid Running Mobile Medical units at different locations for providing preventive healthcare facilities in remote areas. Mobile Medicare Unit Initiative by HPCE डीरियों बीमारी से डरें, टीके से ज Ltd. isolation MMU neglect Providing support for Corrective surgeries and open heart surgeries at St. Stephen's Hospital, New Delhi and National Heart Institute, New Delhi respectively. * 35 Cr. CSR Spend across 9 years HFCL Limited | Investor Presentation Jan 2024 ore FREE COMPUTER CENT देव हरप्री URIGI मा. नरेंद्र मोदी की गहमर - गाजीपुर Training Sponsored By HFCL LIMITED EVERY FREE COMPUTER CENTER Education Initiatives (Past and current) ■ PROJECT SAMARTH: ☐ Adopted specially-abled children and providing grants for their education. Providing Computer Skill Training to the underprivileged youth at our Computer Learning Centers in Ghazipur (U.P.) Education & prevention of malnutrition amongst street children ■ To facilitate the delivery of high-quality digital education, our PEHAL project is dedicated to enhance the infrastructure of government schools in Ghaziabad, Churu and Ghazipur by providing them with the state-of-the-art smart classrooms. Old Age Care Constructed a women wing and provided financial assistance to SHEOWS (Saint Hardyal Educational and Orphan Welfare Society, Delhi), an Old Age Home that provide care for approximately 500 abandoned senior citizen Societal Welfare Welfare for Stray Animals – Providing food, shelter, treatments, sterilizations & rehabilitation facilities for stray animals 36#3805 Financials 4800 440.0 400.0 360.0 Q3FY24 Key Highlights - Consolidated Q3FY24 Consolidated Income Statement 9MFY24 Key Highlights - Consolidated 9MFY24 Consolidated Income Statement 320.0 28 240.0 200.0 2M#39Q3FY24 Key Highlights - Consolidated Total Revenue (IN CRORES) EBITDA & Margin (IN CRORES & %) 1085.84 1032.31 Q3FY23 Q3FY24 17.8% 15.8% 193.33 163.45 Q3FY23 Q3FY24 EBITDA Margin PAT & Margin (IN CRORES & %) Diluted EPS 9.4% Q3FY24 0.58 8.0% 101.62 Q3FY23 82.43 Q3FY23 Q3FY24 PAT Margin HFCL Limited | Investor Presentation Jan 2024 (IN) 0.69 Bagged orders more than crores from leading operators in India. INR 1800 telecom ■ Unveiled a suite of next-gen connectivity and 5G backhauling products like FWA CPE, 5G Small cell, Point to point UBR during India Mobile Congress 2023. ■ Launched 1728 fibre Intermittently bonded ribbon cables. Incorporated step down wholly owned subsidiary Company of HFCL Limited in Canada. 38#40Q3FY24 - Consolidated Profit & Loss Statement Particulars (IN CRORES) Revenue from Operations Q3FY24 Q2FY24 Change Q-o-Q Q3FY23 Change Y-O-Y 1,032.31 1,111.49 -7.12% 1,085.84 -4.93% Other Income Total Income 46.72 17.17 24.33 1079.03 1,128.66 -4.40% 1,110.17 -2.80% Total Expenses 915.58 978.89 916.84 EBITDA 163.45 149.77 9.13% 193.33 -15.46% EBITDA Margin (%) 15.83% 13.47% 236Bps 17.80% -197Bps Depreciation 19.27 21.45 20.13 Finance Cost 36.55 34.78 37.03 Share of net profits/(loss) of JV's accounted using equity 0.23 0.64 0.75 method Exceptional Items PBT PBT Margin (%) Tax Profit after Tax PAT Margin (%) Other Comprehensive Income Total Comprehensive Income EPS (Diluted 107.86 94.18 14.53% 136.92 10.45% 8.47% 198Bps 12.61% -21.22% -216Bps 25.43 24.01 35.30 82.43 70.17 17.47% 101.62 -18.88% 7.99% 6.31% 168Bps 9.36% -137Bps (0.24) 0.51 (0.05) 82.19 70.68 16.28% 101.57 -19.08% 0.58 0.50 16.00% 0.69 -15.94% HFCL Limited | Investor Presentation Jan 2024 39#419MFY24 Key Highlights - Consolidated Total Revenue PAT & Margin (IN CRORES & %) (IN CRORES) EBITDA & Margin (IN CRORES & %) 3310.33 3138.99 15.0% 15.1% 7.2% 7.3% 497.69 472.84 239.03 228.16 9MFY23 9MFY24 9MFY23 9MFY23 9MFY24 PAT 9MFY24 -Margin EBITDA Margin Debt-Equity Ratio (IN X) ROCE 9MFY24 0.26 9MFY24 12.7 9MFY23 0.25 9MFY23 HFCL Limited | Investor Presentation Jan 2024 15.6 (IN %) Diluted EPS 9MFY24 1.57 9MFY23 1.66 (IN) 40 40#429MFY24 - Consolidated Profit & Loss Statement Particulars (IN CRORES) 9MFY24 9MFY23 Change Y-o-Y Revenue from Operations 3,138.99 3,310.33 -5.18% Other Income Total Income 77.06 3,216.05 33.44 3,343.77 -3.82% Total Expenses 2,743.21 2,846.08 EBITDA 472.84 497.69 -4.99% EBITDA Margin (%) 15.06% 15.03% 3Bps Depreciation 61.62 61.53 Finance Cost 107.63 114.27 Share of net profits/(loss) of JV's accounted using equity method 0.98 (0.21) Exceptional Items PBT PBT Margin (%) Ταχ Profit after Tax PAT Margin (%) Other Comprehensive Income Total Comprehensive Income EPS (Diluted HFCL Limited | Investor Presentation Jan 2024 304.57 321.68 -5.32% 9.70% 9.72% -2Bps 76.41 82.65 228.16 239.03 -4.55% 7.27% 7.22% 5Bps (0.65) (0.79) 227.51 238.24 1.57 1.66 -4.50% -5.42% 41#4306 Appendix Management Team Board of Directors Shareholders' Information Abbreviations / Description#44Led by an Experienced Management Team (1/2). SUBODH KUMAR GARG VIJAY RAJ JAIN Executive Director (Growth Strategy) Group Chief Financial Officer PETER WEIMANN RAJESH JAIN Chief Technology Officer (OFC) Executive President (Telecom EPC Projects) HFCL Limited | Investor Presentation Jan 2024 JITENDRA SINGH CHAUDHARY Executive President (Communications) HARSHWARDHAN PAGAY Executive President (OFC) MANISH GANGEY Executive President (Product Management) JAYANTA DEY Executive President (5G Business) 43#45Led by an Experienced Management Team (2/2). JOCHEN ARMS DEVENDER KUMAR Executive President (Project Delivery) Vice President, Sales (DACH, Europe) (OFC) SANJAY VITHALRAO JORAPUR President (Human Resources) NAND LAL Garg President (Supply Chain) SUNIL KUMAR PANDEY Chief Information Officer HFCL Limited | Investor Presentation Jan 2024 MANOJ BAID President & Company Secretary ANDREW WESTERMAN Vice President, International Sales (Communication Products) ROB GILBERT Country Manager (OFC Sales) UK, Ireland 44#46Governed by an Experienced Board 01 01 02 MAHENDRA NAHATA Promoter and Managing Director AJAI KUMAR Independent Director 03 BHARAT PAL SINGH Independent Director 04 SURENDRA SINGH SIROHI Independent Director 05 TAMALI SEN GUPTA Independent Director 06 ARVIND KHARABANDA Non-Executive Director 07 RANJEET MAL KASTIA Non-Executive Director HFCL Limited | Investor Presentation Jan 2024 03 03 02 -0 04 50 05 95 06 07 45#47Shareholders' Information Share Information (AS ON December 31, 2023) NSE Ticker BSE Ticker Market Cap ( Crores) HFCL 500183 % free-float Free-float market cap (Crores) Shares Outstanding 3M ADTV (Shares) 3M ADTV (Crores) Industry HFCL Limited | Investor Presentation Jan 2024 12,024.55 83.09% 9,991.20 1,42,87,72,812 1,68,57,252 129.17 Telecommunications - Equipment & Solutions HFCL in Numbers as on 31 December, 2023 49.79% Others 37.84% Promoters 4.19% Mutual Funds 8.18% Fils and FPIS 46 46#48Abbreviations / Description Abbreviation 3GPP ARP CAGR CPE Description 3rd Generation Partnership Project Aramid Reinforced Plastic Compounded Annual Growth Rate Consumer Premises Equipment Abbreviation O&M OFC Order Book DPEPP Defense Production & Export Promotion Policy DU/CU Distributed Unit / Centralized Unit Aggregation Router Aggregation Routers PAT EPC Fkm FRP Engineering, Procurement and Construction Fiber kilometres Fiber Reinforced Plastic PLI R&D RAN FTTH Fiber To The Home RF Front End FTTx Fiber To The x ROCE FWA Fixed Wireless Access ROW GIS map Geographic Information System map RRTS IGFR Impregnated Glass Fiber Reinforcement UBR OEM Original Equipment Manufacturer VSS MMU MPLS Mobile Medical Unit Multi-Protocol Label Switching HFCL Limited | Investor Presentation Jan 2024 Description Operating & Maintenance Optic Fiber Cable Order book comprises anticipated revenues from the unexecuted portions of existing contracts (including signed contracts for which all pre-conditions to entry into force have been met & letters of acceptance issued by the customer prior to execution of the final contract) Profit after Tax Production Linked Incentive Research & Development Radio Access Network Radio frequency front end Return on Capital Employed Right of Way Rapid Rail Transit System Unlicensed Band Radio Video Surveillance System 42 47#49Consolidated Profit & Loss Statement Particulars (IN CRORES) Revenue from Operations Other Income Total Income 9MFY24 3,138.99 4,743.31 FY23 FY22 4,727.11 FY21 4,422.96 77.06 3,216.05 47.18 4,790.49 42.91 4,770.02 36.13 4,459.09 Total Expenses 2,743.21 4,124.63 4,077.04 3,873.38 EBITDA 472.84 665.86 692.98 585.71 EBITDA Margin (%) 15.06% 14.04% 14.66% 13.21% Depreciation 61.62 82.97 78.25 68.63 Finance Cost 107.63 152.19 166.40 176.09 Share of net profits/(loss) of JV's accounted using equity method 0.98 (0.09) 0.16 Exceptional Items 6.38 4.13 PBT 304.57 430.61 442.11 336.86 PBT Margin (%) 9.70% 9.08% 9.35% 7.62% Ταχ Profit after Tax PAT Margin (%) 76.41 112.90 116.25 90.62 228.16 317.71 325.86 246.24 7.27% 6.70% 6.89% 5.57% Other Comprehensive Income (0.65) 1.55 1.71 4.96 Total Comprehensive Income EPS (Diluted) 227.51 319.26 327.57 251.20 1.57 2.18 2.38 1.87 HFCL Limited | Investor Presentation Jan 2024 48#50Consolidated Balance Sheet Equities & Liabilities (₹ IN CRORES) Total-Shareholder Funds NON CURRENT LIABILITIES (A) Financial Liabilities (i) Borrowings (ii) Other Liabilities (B) Other Non Current Liabilities Total Non-Current Liabilities CURRENT LIABILITIES (i) Borrowings H1FY24 FY23 FY22 FY21 3,604.41 3,144.14 2,818.37 1,923.47 132.16 110.37 121.25 20.64 6.20 19.34 250.78 54.97 99.09 69.72 34.74 251.89 186.29 175.33 305.75 728.88 637.94 621.55 668.84 (ii) Other Liabilities 1,334.37 1,504.22 1556.21 2317.74 - Total Current Liabilities 2,063.25 2,142.16 2,177.76 2,986.58 GRAND TOTAL - EQUITIES & LIABILITES 5,919.55 5,472.59 5,171.46 5,215.80 Assets (IN CRORES) H1FY24 FY23 FY22 FY21 (A) Tangible Assets 607.49 574.91 536.16 475.49 (B) Goodwill 26.17 26.17 26.17 26.17 (C) Other Intangible Assets 314.85 215.31 74.10 42.17 (D) Investment in Associates / JV 19.32 18.57 11.66 (E) Financial Assets (i) Trade receivables 485.61 423.11 595.61 444.83 (ii) Other Financial Assets 102.76 92.82 85.94 52.35 (F) Other Non Current Assets Total Non Current Assets (A) Inventories (B) Financial Assets (i) Trade Receivables (ii) Cash & Bank Balances (iii) Others-Advances (iv) Others (C) Other Current Assets Total Current Assets 62.07 39.55 22.52 24.96 1,618.27 1,390.44 1,352.16 812.49 757.85 573.38 1,065.97 435.26 1,880.67 1,886.11 1,895.94 2,610.99 455.28 322.59 528.24 306.44 665.43 533.57 386.31 461.81 26.05 33.87 34.84 17.66 461.36 548.16 400.59 317.77 4,301.28 4,082.15 3,819.30 4,149.83 GRAND TOTAL - ASSETS 5,919.55 5,472.59 5,171.46 5,215.80 HFCL Limited | Investor Presentation Jan 2024#51Thank you Corporate Office 8, Commercial Complex, Masjid Moth, Greater Kailash Part 2, New Delhi, Delhi - 110048 /// Amit Agarwal HEAD - INVESTOR RELATIONS HFCL Limited Tel: +91-11-3520 9400 Email: [email protected] /// HFCL ////#52Disclaimer This presentation ("Presentation") does not constitute a prospectus, offering memorandum or an offer, or a solicitation of any offer, to purchase or sell any securities. This presentation should not be considered as a recommendation that any investor should subscribe to or purchase any securities of HFCL Limited ("Company") or its subsidiaries (collectively, the "Group") and should not be used as a basis for any investment decision. The information contained in this presentation is only current as of its date and has not been independently verified. The Group will not update you in the event the information in the presentation becomes stale. Moreover, both express or implied representation or warranty is made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this presentation. None of the Group or any of its affiliates, advisers or representatives accept any liability whatsoever for any loss howsoever arising from any information presented or contained in this presentation. Furthermore, no person is authorized to give any information or make any representation which is not contained in, or is inconsistent with, this presentation. Any such extraneous or inconsistent information or representation, if given or made, should not be relied upon as having been authorized by or on behalf of the Group. This presentation is highly confidential, being given solely for your information and for your use, and may not be copied, reproduced or redistributed to any other person in any manner. The distribution of this presentation in certain jurisdictions may be restricted by law. Accordingly, any person in possession of this presentation should inform themselves about and observe any such restrictions. This presentation contains certain statements of future expectations and other forward-looking statements, including those relating to the Group's general business plans and strategy, its future financial condition and growth prospects, and future developments in its sectors and its competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words 'may', 'will', 'should', 'expects', 'plans', 'intends', 'anticipates', 'believes', 'estimates', 'predicts', 'potential' or 'continue' and similar expressions identify forward looking statements. All forward looking statements are subject to risks, uncertainties and assumptions that could cause actual results, performances or events to differ materially from the results contemplated by the relevant forward looking statement. The factors which may affect the results contemplated by the forward looking statements could include, among others, future changes or developments in (i) the Group's business, (ii) the Group's regulatory and competitive environment, and (iii) political, economic, legal and social conditions in India or the jurisdictions in which our Group operates. HFCL Limited | Investor Presentation Jan 2024 51