Domestic telecom gear maker HFCL today reported 3.97 per cent increase in standalone net profit at Rs 71.68 crore for second quarter ended September 30 on the back of cost control.

The company had posted a net profit of Rs 68.94 crore in the same period a year ago.

“We have seen an increase in profits due to cost control and improved margins. Our optical fibre cables and turnkey projects have been the major contributors to our overall growth,” HFCL Managing Director Mahendra Nahata said in a statement.

Himachal Futuristic Communications Limited (HFCL), which manufactures telecom equipment and optical fibre cables as well as executes telecom turnkey contracts, reported decline in net sales by 9.69 per cent to Rs 587.52 crore in the reported quarter from Rs 650.58 crore in corresponding quarter of 2014-15.

“The revenue in the second quarter is marginally low due to the rainy season, which impacts project implementation. However, the outlook for the second half looks bright. Besides this, we have seen a huge jump in exports in the first half of the year,” Nahata said.

The company’s exports increased by 78 per cent to Rs 20 crore from Rs 9.09 crore in same quarter a year ago.

HFCL has started exporting to UK, Poland, South Africa, Qatar, Dubai, Malaysia, Iran, Bangladesh, Nepal, and Morocco, he added.

The employee benefits expenses at HFCL reduced by about 37 per cent during period under review.

HFCL spokesperson said that the reduction was a result of the company moving around 2,000 out of its about 5,000 employees to clients’ payroll after completion of project for operation and maintenance.

HFCL had an order-book of around Rs 2,700 crore in the reported quarter which included Rs 1,500 crore orders for 4G services project, the spokesperson said.

“In order to increase the capacity for manufacturing of optical fibre cables, the company is setting up manufacturing facility in Chennai, under our subsidiary called HTL Ltd.

“The commercial production is likely to commence from November 15 onwards. The impact of this expansion will be visible in the next fiscal,” Nahata said.

HFCL recently ventured in to manufacturing of electronic warfare for defence segment and sees as one of the pillars for company’s growth in future.

“With the government’s increased impetus to enhance indigenous procurement for the defence segment, the company has received various industrial licenses for the manufacturing of electronic warfare systems, radars, UAVs, night vision system, electronic fuzes and CBRN,” Nahata said.

The company has declared an interim dividend of Rs 3.25 per share on 80,50,000 cumulative redeemable preference shares of Rs 100 each for the financial year 2015-16.

HFCL shares closed 1.95 per cent down at Rs 17.6 apiece, on the BSE today.