HCL

Hindustan Cables Ltd had experienced

sliding of its performance in 1996-97 from that of 1995-96 marking a negative growth of

2.95 percent. It was again forced to settle with a negative growth of 12.82 percent in the

last fiscal. Its revenues dipped in the last fiscal to Rs 272 crore (unaudited) from the

previous year’s Rs 312 crore.

The company, in the process, moved down

from the #5 position in V&D Top 10 Club in 1995-96 to #8 in 1996-97, and now to #9. It

speaks volumes for the company.

However, the company has a target of doing

Rs 539 crore in the current fiscal. However, it is a stiff target and how to materialize

this ambitious target is no ones guess.

The fall in the revenue collections are

attributed to many reasons. Paucity of orders, shortage of working capital due to

servicing of orders under deferred credit system of payments by DoT, high incidence of

fixed overheads, and adverse debt equity ratio.

HCL, one of the leading manufacturers of

telecom cables, was set up to cater to the needs of DoT, Railways, Defence, and other

public sector utilities like power grid and ONGC.

The main varieties of telecommunication

cables earlier manufactured by the company were dry core cables, co-axial cables, plastic

cables and wires, copper-coated steel ware, railway cables (main and derivation) and

jointing materials.

Due to product obsolescence, the

manufacturing of these cables were stopped and in their place jelly-filled cables, optical

fibre cables, its accessories, and transmission equipment are presently being manufactured

by the company. The company has three major units manufacturing the above mentioned

cables, located in Rupnarayanpur, Hyderabad, and Naini (Allahabad).

In a monoply era, the company was under

the umbrella of "cost plus" contract with DoT. However, with the winds of

liberalization sweeping the country and facing stiff competition from cable companies like

Sterlite, Finolex, Vindhya Telelinks, and Usha Beltron, the company had to look for new

product portfolios, pushing the margins to the bottomline. And thus came its alliance with

DSC Commnunications for the production of SDH/PDH products.

Also, the company has to diversify its

activities to the manufacturing of power cables, a trend across the cable companies now.

It has also plans to opt for backward integration by manufacturing copper rods and coil

cords.

The buying of DSC Communications by

Alcatel may make some ripples here in India too. If that happens, it may affect the

alliances of that company with HCL.

The company’s turnkey solutions

division is doing well. It undertakes projects such as construction of underground cable

ducts/cable laying, and installation and commissioning of digital transmission equipment.

Its principal customers in this front are DoT, MTNL, and ONGC. The cellular and basic

services segments are another good opportunity for the company as far as these projects

are concerned. However, no information is available about the foray of HCL into both the

segments.

Its another burden is the mammoth labour

force cutting down its profits. It has to go in the way of ITI to come out of this loop.

Also, the company has to move with certain visions. It has to enter into strong alliances

to improve its product portfolio and learn some lessons from the other two PSUs in the

V&D Top 10 league—ITI and HTL— how to stride on a difficult market and

explore opportunities in the global market.

If not, it will keep on moving down the

curve. 

alt="https://img-cdn.thepublive.com/filters:format(webp)/vnd/media/post_attachments/2b744199b5b4d9cc559bb768afa8947399e40f24cc0d688d9f5bf35a2b730195.jpg (17285 bytes)"> CEO: NK Agarwal Year Of Start-up: 1952 Turnover: Rs 272 crore (unaudited) Growth: -12.82 percent Area Of Operation: Telecom cables, consultancy, turnkey operations Employees: 4,900 Address: 9 Elgin Road, Calcutta - 700 020 Tel.: 033-2479101/2471808/2472884 Fax: 033-2471657