I suspect the reason that HCL's share price is at the current...

I suspect the reason that HCL's share price is at the current level because beyond the last one off orders that they fulfilled in CY2022, the company has not been profitable (and if you look at FY2018-2020 it shows a NPAT of $0.1-0.3m......hardly a sign of a company that is shooting the lights out).

	AUDm	1H2021	2H2021	1H2022	2H2022	1H2023	2H2023
1	Revenues	12.4	15.9	11.5	46.7	48.5	40.9
2	Gross Profit	3.2	4.9	3.1	24.3	24.6	9.1
3	Gross Margin	26%	31%	27%	52%	51%	22%
4	Expenses	7.0	5.5	10.1	10.6	14.7	10.2
5	NPBT	-3.5	-0.4	-6.8	14.0	10.0	-1.0
6	NPAT	-3.5	-0.4	-6.8	12.6	6.0	0.0
7	EPS (Basic)	-5.0	-0.8	-7.5	13.8	6.0	0.0

The biggest concern is that without that one off order (which was at a significantly higher margin), HCL would not have been profitable and the market is rightly asking how can it support the higher CODB with a normalised revenue run rate and gross margin. The other aspect is that if they do get another large order, like EOS they have to fund the inventory and the monies from CY2022 have already been spend on inventories (which may not align to fulfil that order)......hence the market is expecting a capital raise if this eventuates.

The positives are that they are now getting some regular income from maintenance and support of the SUAS fleet they sold, and if mgmt are being honest, there is a $2m revenue run rate for Highcom which should at least cover some of the fixed costs they have.

It seems based on the war in Ukraine and even in Gaza that the future is drones, but it is a pity that they don't own any IP in this space as there is huge potential for a company in this region to make decent business from this......but with the nutters in the US I guess there will be a long runway to sell Highcom protection to everyone