Frog Cellsat Ltd
About the Company
Frog Cellsat Limited is a prominent design house and manufacturer of advanced radio frequency (RF) equipment, catering to the telecommunications industry for over two decades. Established in 2004, the company specializes in mobile network enhancement solutions from 2G to 5G, ensuring reliable connectivity for millions globally. Its robust infrastructure includes cutting-edge R&D capabilities and state-of-the-art manufacturing facilities in Noida, India. The company is aligned with the "Make in India" initiative, focusing on import substitution and innovation.
Business Overview
The company operates as a design house and manufacturer of radio frequency (RF) equipment and solutions for the telecommunications industry. The company emphasizes in-house design and manufacturing to align with the "Make in India" initiative, contributing to domestic manufacturing and job creation. Frog Cellsat's products serve as essential components for telecom towers and public safety networks, ensuring connectivity for millions of users.
The company's business model involves providing end-to-end solutions to mobile operators, including planning, design, and installation services. Frog Cellsat offers more than 27 products, ranging from RF repeaters to antennas, catering to mobile networks from 2G to 5G and beyond. The company also develops and expands its product offerings to meet evolving market demands.
Frog Cellsat adopts a customer-centric approach, delivering tailored solutions to specific coverage and transmission challenges. The company understands the unique needs of government and public sector users, provides customized RF equipment solutions, and is committed to customer satisfaction.
Financial Report
Share Capital & Number of Employees
Share price and Volume (last 1 year):
Month and Year | April-2024 | May-2024 | June-2024 | July-2024 | August-2024 | September-2024 | October-2024 | November-2024 | December-2024 | January-2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Volume | 3087000 | 558000 | 917000 | 1091000 | 760000 | 1013000 | 2036000 | 2031000 | 3045000 | 576000 |
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Key Highlights & Management Guidance
New Facility: FCL has moved to a new state-of-the-art 1.6 lakh square foot facility in Noida, centralizing and streamlining operations.
Customer Acquisition: The company has successfully added Jio, Tejas, ITI Limited, Indus, and Crest Digital as valued customers.
Product Expansion: FCL has added seven new products to its portfolio, used in mobile, railway, metro, and airport communication networks.
Interference Mitigation System: Trials for their interference mitigation system have been completed, with commercial agreements expected soon.
Orders:
- Secured an ₹31 crore order from Metrotel Telworks to enhance mobile coverage at Mumbai International Airport.
- Secured a ₹ 16 crore contract for the deployment of their OneDAS system at Navi Mumbai International Airport.
- Completed the deployment of OneDAS at Chaudhary Charan Singh Airport in Lucknow.
- The company also has orders from Motorola, L&T, Adani, and others.
- The order book at the end of Q2 FY25 reached INR 1,100 million. As of December 31, 2024, the order book was at ₹1050 million. The order book is a mix of operators and DAS customers.
- SMT Line: FCL is investing in an SMT (Surface Mount Technology) line for manufacturing-as-a-service. This will allow them to manufacture products like SFPs, IP cameras, and Wi-Fi routers. The SMT line is expected to be operational by Q4 FY25. The capital expenditure for the SMT line is approximately ₹10 crore.
- New Products: FCL unveiled new innovations at the India Mobile Congress, including active DAS for 5G, smart mini boosters for IoT, VHF repeaters for railways, and noise field solutions.
- Global Expansion: The company is planning to enter the global active DAS market, valued at over $1 billion. FCL is forming collaborations with partners, system integrators, and resellers in Europe and Africa.
Industrial Outlook
The telecom industry in India is experiencing significant expansion and transformation, propelled by a surge in mobile users, governmental initiatives, and technological progress. India holds the position of the world's second-largest telecommunications market and boasts the third-highest number of internet users globally. This dynamic sector is characterized by several key trends:
•Market Valuation and Growth: The Indian telecom market is currently valued at INR 3,000 billion (US$ 35.9 billion) and is projected to grow at an annual rate of nearly 7-9 percent by fiscal year 2024.
•Mobile Economy Expansion: The Indian mobile economy is rapidly growing, with expectations of making a substantial contribution to the country's Gross Domestic Product (GDP). In 2019, India overtook the United States to become the second-largest market for app downloads. Currently, the average mobile user in India consumes approximately 20 GB of internet data each month.
•Key Growth Drivers: Several factors are propelling growth in the Indian telecom sector, including the increasing demand for 5G networks, supportive government policies, evolving regulations, and the accessibility of affordable services.
•Government Initiatives: The central government's introduction of the National Digital Communications Policy in September 2018 aims to attract US$100 billion in investments and generate 4 million jobs in the sector by 2022. Additionally, the National Broadband Mission seeks to provide broadband access to all villages by 2022.
•ICT Infrastructure Advancement: There has been notable progress in the development of Information and Communication Technology (ICT) infrastructure, marked by the adoption of technologies such as 5G and Satellite Communication (SatCom). Sectors like 5G/6G, SatCom, and semiconductors are anticipated to experience significant growth.
•Manufacturing and Investment Focus: India has been actively increasing its manufacturing capabilities in telecom equipment, supported by the government's Production Linked Incentive (PLI) scheme. This scheme, valued at INR 121.95 billion (US$ 1.4 billion), has attracted substantial Foreign Direct Investment (FDI), with inflows of US$8.88 billion over the past five years. From April 2000 to March 2024, the telecom sector has received a cumulative equity inflow of US$39.32 billion.
•Favorable Policy and Regulatory Environment: India has streamlined market access for telecom equipment manufacturers and established a fair and proactive regulatory framework to ensure affordable telecom services for consumers. The relaxation of Foreign Direct Investment (FDI) norms has further contributed to the sector's rapid growth and job creation.
•Innovation and Startup Ecosystem: India is emerging as a hub for innovation, fueled by its strengths in 5G networks, enterprise digital transformation, and a vibrant startup ecosystem. Increased service revenue and investor-friendly policies have solidified India's position as a prominent center for telecom manufacturing
Financial Highlights
| PARTICULARS | Q1FY25 | Q2FY25 |
|---|---|---|
| Sales | ₹44Cr | ₹91 Cr |
| OPM% | 5% | 24% |
| Net Profit | ₹3 Cr | ₹16 Cr |
Shareholding Pattern
Mar'2024 | Sep'2024 | |
|---|---|---|
| Promoters | 74.10% | 72.71% |
| FIIs | 0.00% | 0.01% |
| Retailers | 25.90% | 27.28% |
Capsule’s View
- Growth Drivers: The telecom industry is undergoing a major CAPEX uptake, with operators investing in 4G and 5G network upgrades. FCL is positioned to capitalize on this growth, particularly in in-building solutions. They also expect growth from the third operator with funding in place and the BSNL 4G project.
- Guidance: FCL expects a growth of about 30% in FY25 from last year, with an EBITDA margin of around 15%. There is potential for an additional 10% growth if they secure a few large deals. The company aims to achieve ₹500 crore in revenue by FY28, with margins in the range of 10%.
- Competition: FCL's competitors include companies like PROSE Technologies, HUBER & SUHNER, and RV Telecom. They also face competition from international companies like CommScope, JMA Wireless, Solid, and Comba. However, FCL emphasizes its unique position as the only Indian manufacturer of these types of products, giving them an edge with the "Make in India" initiative and national security certifications.
Opportunities:
- In-building solutions: The company sees significant growth opportunities in in-building solutions, with companies like Indus and Crest undertaking large expansion targets.
- Railway communication: FCL has developed VHF solutions for railways, representing a diversification from mobile operators. They are also focused on public safety network solutions.
- Interference Mitigation: The company's interference mitigation solution has completed trials, and commercial negotiations are underway.
- Active DAS: There is a large opportunity for active DAS solutions, with upgrades required at existing airports and new airports and metros being built. They are seeing success with their active DAS solutions, having secured multiple large airport projects.
- New products: The company is focused on developing new products and exploring new markets to create value for its stakeholders.
- Challenges: The company faces challenges, including the slow movement in the defense segment, and price competition, especially in passive products. They are also working to bridge the gap between costs and customer price expectations for their interference mitigation systems.
- FCL aims to become a major player in the global market. The company is focused on increasing revenues from active products like DAS and digital repeaters, which have higher margins. They also plan to expand their EMS business, manufacturing products like SFPs, IP cameras, and Wi-Fi routers