HFCL shares rebound 5% on Rs 523 crore order win. Still time to buy after 195% rally in 6 months?
HFCL stock has rallied a staggering 195% in the last six months. As a result, FIIs more than doubled their stake in the company from 7.1% in the March quarter to 15.7% in June.
HFCL Q1 results
HFCL reported a net profit of Rs 246 crore in the first quarter of financial year 2027, compared with a net loss of Rs 29.30 crore in the same quarter last year. Revenue from operations came in at Rs 1,915 crore, up 120% from Rs 871 crore in the corresponding quarter of the previous financial year.
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The company reported its highest-ever order book of around Rs 26,665 crore in Q1FY27, nearly five times its FY26 revenue, strengthening its long-term revenue visibility. The export story has also gathered pace. Export revenue rose to Rs 1,063.30 crore, accounting for 55.53% of total revenue in Q1FY27, compared with Rs 209.70 crore, or 24.08% of revenue, in Q1FY26.
HFCL has revised its FY27 revenue growth estimate to 40%. Its board has also approved an investment of Rs 215 crore to build a manufacturing facility for advanced AI data centre connectivity solutions.
Still time to buy HFCL shares?
Deven Choksey Research sees another 86.50% upside potential, calling defence and aerospace the “X-factor” that changes the entire investment thesis for the stock. The brokerage initiated coverage on HFCL with a ‘Buy’ rating and a target price of Rs 362 apiece earlier this week.
HFCL has consolidated its defence assets under HFCL Advance Systems (HASPL), integrating aerostructure manufacturing, including the acquired business with more than Rs 2,000 crore in export orders, radar or surveillance systems through Raddef, and thermal weapon sights into a single scalable entity.
Read more: HFCL bags Rs 442 crore optical fibre cable export orderAn ammunition manufacturing facility is being established in Andhra Pradesh for electronic fuzes, multi-mode hand grenades (for which there are only 3 licensees in India), and 155 mm artillery shells.
“We believe defence revenue trajectory to be Rs 77 crore (FY26) to Rs 400 crore (FY27) to Rs 1,200 crore (FY28) to Rs 5,000 crore (FY29), at 25%+ EBITDA margins. Critically, defence customers provide advance payments, dramatically improving working capital dynamics compared to the legacy EPC business,” Deven Choksey said.
HFCL is also gradually transitioning from a commodity OFC supplier to a high-value AI optical connectivity platform through its OptiQ AI brand, which was launched earlier this month, Deven Choksey noted. “Through subsidiary HTL Limited, data centre interconnect (DCI) solutions are expected to contribute Rs 400 crore in FY27 and Rs 800 crore in FY28, at margins above the blended corporate average. The global AI optical interconnect TAM is projected at $73 billion by CY30,” the brokerage further said in its report.
According to the brokerage, HFCL is at an inflection point where three structural shifts are converging simultaneously. The company is transitioning from a domestic EPC-dependent telecom contractor into an export-led, product-driven technology platform spanning AI optical connectivity, defence electronics and aerospace manufacturing.
Monarch Networth echoes the view. According to analysts, HFCL has evolved rapidly from being a largely domestic optical fibre cable manufacturer into a globally diversified technology company.
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HFCL is India’s largest optical fibre cable manufacturer, with manufacturing facilities across the country. Analysts added that the company was the first Indian player to develop and commercialise 5G Fixed Wireless Access customer-premises equipment.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
