HFCL Ltd
HFCL Ltd
TelecommunicationHFCL Ltd (Himachal Futuristic Communications Limited) is a diverse telecom infrastructure enabler with active interest spanning telecom infrastructure development, system integration, and manufacture and supply of high end telecom equipment, Optical Fiber and Optic Fiber Cable (OFC).[1]
HFCL trades at a PE of 97.5x with only 7% ROE and 2% 5-year sales CAGR, making the valuation extremely stretched despite recent TTM sales growth of 22% and profit growth of 76%. The stock has delivered 156% returns in 1 year but fundamental metrics do not justify the premium, warranting caution at current levels.
Key Fundamentals
SmallcapTelecom InfrastructureTelecomTechnical Indicators
Key Insights
Strengths
1- Company is expected to give good quarter
Weaknesses
6- Stock is trading at 6.41 times its book value
- The company has delivered a poor sales growth of 2.27% over past five years.
- Company has a low return on equity of 6.81% over last 3 years.
- Dividend payout has been low at 8.89% of profits over last 3 years
- Company has high debtors of 163 days.
- Promoter holding has decreased over last 3 years: -10.9%
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 1d agoHFCL trades at a PE of 97.5x with only 7% ROE and 2% 5-year sales CAGR, making the valuation extremely stretched despite recent TTM sales growth of 22% and profit growth of 76%. The stock has delivered 156% returns in 1 year but fundamental metrics do not justify the premium, warranting caution at current levels.
- TTM revenue growth accelerated to 22%, signalling a strong order execution cycle after years of stagnant 2% 5-year sales CAGR
- TTM profit growth of 76% indicates significant operating leverage kicking in as telecom capex cycle picks up
- Stock CAGR of 156% over 1 year reflects strong market momentum and re-rating of the telecom infrastructure theme
- 10-year stock CAGR of 28% demonstrates consistent long-term wealth creation for patient investors
- Company is expected to deliver a good upcoming quarter, suggesting near-term earnings visibility remains intact
- Market cap of Rs 31,471 Cr positions HFCL as a mid-cap telecom equipment player benefiting from government push for domestic manufacturing
- 10-year ROE average of 10% shows the business can generate reasonable returns over full economic cycles
- PE ratio of 97.5x is extremely expensive for a company with only 7% ROE, implying the stock prices in years of flawless execution
- 5-year compounded sales growth of just 2% shows the business has historically struggled to scale revenues consistently
- Price-to-book of 6.56x is very high for a capital-intensive telecom equipment company with modest return ratios
- ROE of just 6.81% over last 3 years is well below cost of equity, indicating poor capital efficiency
- Promoter holding has declined by 10.9% over last 3 years, signalling reduced skin-in-the-game by insiders
- Debtor days of 163 indicate severe working capital stress and delayed collections from clients
- Dividend yield of just 0.05% with payout ratio of only 8.89% means shareholders get negligible cash returns
- Zero analyst coverage suggests limited institutional interest and lack of independent research validation
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 14h ago- Stretched valuation above 70x P/E Jun 17
HFCL trades at a trailing P/E above 70x, significantly above historical averages, placing it firmly in the high-risk high-reward category per analyst consensus.
- Sharp 18.6% correction in 6 sessions Jun 11
Stock fell 18.63% over six trading sessions after hitting resistance at the ₹185-190 zone, hitting 5% lower circuit intraday before partial recovery to ₹164.95.
- Rising interest costs and working capital May 27
Interest costs rose to ₹242 crore in FY26 from ₹185 crore in FY25, while cash conversion cycle stretched to 210 days reflecting working capital intensity of large government projects.
- 15% weekly drop on profit booking Jun 14
HFCL shares fell 15% in the week ended Jun 14 amid profit booking, though a hammer formation on Thursday and close above 20-day SMA suggest the correction may have run its course.
- ₹2666 Cr BharatNet Phase-III order Jun 17
HFCL secured a ₹2,666.09 crore contract from RVNL for BharatNet Phase-III in UP West, including supply, installation, and 10 years of maintenance.
- Record ₹21,200 Cr order book Jun 17
Order book hit an all-time high of ~₹21,200 crore including a ~₹10,159 crore international optical fibre cable contract, providing strong multi-year revenue visibility.
- FY26 revenue nearly doubled to ₹4,949 Cr Jun 17
Consolidated FY26 revenue reached a record ₹4,949 crore with EBITDA of ₹827 crore and PAT of ₹329 crore; Q4 revenue surged 128% YoY to ₹1,824 crore.
- 200% stock surge in 6 months Jun 17
Shares surged nearly 200% in six months driven by AI/data centre boom, with 152% gains YTD in 2026, positioning HFCL as a pure-play AI connectivity beneficiary.
- ₹135 Cr RailTel defence AMC contract May 27
Secured ₹135.09 crore purchase order from RailTel for 5-year AMC of secure defence OPS network covering 1 central data centre and 120 mini data centres until January 2031.
- Defence vertical scaling rapidly May 27
HFCL targeting ₹400-500 crore defence revenue in FY27 scaling to ₹1,000 crore by FY28, with ₹230 crore ammunition facility in Andhra Pradesh and Defsys acquisition boosting capabilities.
- Product mix transformation to 59% Jun 17
Product revenue grew from 27% of mix in FY21 to 59% in FY26, with exports now at 41% of revenue, reflecting fundamental business transformation away from services dependency.
- Management guides 20-25% FY27 growth Jun 17
Management guided for 20-25% revenue growth in FY27 with 3-4 percentage point EBITDA margin expansion, targeting long-term aspiration of ₹10,000 crore revenue.
- Multiple NSE block trades at ₹219.69 Jun 22
Eight block deals recorded on NSE with the latest at ₹219.69 per share for ~14.8 lakh shares worth ₹32.52 crore, reflecting sustained institutional interest across a ₹161-220 price range.
- Defence conference and plant visit Jun 8
HFCL management attended a Defence Conference in Hyderabad on June 11, 2026, followed by a plant visit on June 12 to discuss business updates with investors.
- Thermal Weapon Sight transfer to subsidiary Jun 3
HFCL transferring Thermal Weapon Sight business to subsidiary HFCL Advance Systems for ₹50 crore, investing ₹89.25 crore in the subsidiary, and divesting 80% stake in Raddef for ₹75 crore to consolidate defence ops.
- Technical support at ₹154-155 Fibonacci Jun 11
The 0.618 Fibonacci retracement level near ₹154-155 is acting as immediate support; broader uptrend intact as long as stock holds above this zone on closing basis.
TL;DR: HFCL is executing a remarkable transformation from a domestic telecom services company into a diversified technology and defence player, with FY26 revenue nearly doubling to ₹4,949 crore and an all-time high order book of ₹21,200 crore. The AI/data centre boom and BharatNet orders provide strong multi-year visibility. Key risks are the stretched valuation above 70x P/E, rising interest costs, and working capital intensity that could pressure cash flows on large government projects. The trend is strongly positive on fundamentals but vulnerable to sharp corrections given the 200% run-up, making execution on the massive order book the critical variable ahead.
Quarterly Results
| Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 1,433 | 995 | 1,111 | 1,032 | 1,326 | 1,158 | 1,094 | 1,012 | 801 | 871 | 1,043 | 1,211 | 1,824 |
| Expenses | 1,279 | 849 | 979 | 916 | 1,130 | 984 | 935 | 860 | 838 | 843 | 853 | 983 | 1,510 |
| Operating Profit | 154 | 146 | 133 | 117 | 196 | 175 | 158 | 152 | -37 | 28 | 190 | 228 | 314 |
| OPM % | 11% | 15% | 12% | 11% | 15% | 15% | 14% | 15% | -5% | 3% | 18% | 19% | 17% |
| Other Income | 14 | 13 | 18 | 47 | 14 | 10 | 15 | 21 | 14 | 15 | 13 | 17 | 22 |
| Interest | 38 | 36 | 35 | 37 | 40 | 42 | 45 | 47 | 51 | 56 | 61 | 63 | 63 |
| Depreciation | 21 | 21 | 21 | 19 | 20 | 24 | 25 | 26 | 30 | 32 | 36 | 44 | 45 |
| PBT | 109 | 103 | 94 | 108 | 149 | 119 | 102 | 100 | -105 | -45 | 106 | 138 | 228 |
| Tax % | 28% | 26% | 25% | 24% | 27% | 7% | 28% | 28% | -21% | -34% | 32% | 26% | 19% |
| Net Profit | 79 | 76 | 70 | 82 | 109 | 111 | 73 | 73 | -83 | -29 | 72 | 102 | 184 |
| EPS in Rs | 0.52 | 0.49 | 0.49 | 0.58 | 0.76 | 0.77 | 0.51 | 0.51 | -0.56 | -0.22 | 0.47 | 0.64 | 1.17 |
Profit & Loss
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 2,553 | 2,872 | 2,131 | 3,227 | 4,738 | 3,839 | 4,423 | 4,727 | 4,743 | 4,465 | 4,065 | 4,949 |
| Expenses | 2,272 | 2,600 | 1,944 | 2,944 | 4,320 | 3,346 | 3,873 | 4,077 | 4,125 | 3,884 | 3,616 | 4,188 |
| Operating Profit | 281 | 273 | 187 | 283 | 418 | 493 | 550 | 650 | 619 | 582 | 449 | 762 |
| OPM % | 11% | 10% | 9% | 9% | 9% | 13% | 12% | 14% | 13% | 13% | 11% | 15% |
| Other Income | 110 | -29 | 21 | 24 | 40 | 22 | 31 | 37 | 47 | 102 | 58 | 66 |
| Interest | 44 | 62 | 62 | 64 | 92 | 115 | 175 | 166 | 152 | 147 | 185 | 242 |
| Depreciation | 34 | 26 | 22 | 23 | 27 | 42 | 69 | 78 | 83 | 82 | 106 | 157 |
| PBT | 312 | 156 | 124 | 220 | 339 | 358 | 337 | 442 | 431 | 454 | 217 | 428 |
| Tax % | 0% | 0% | 0% | 22% | 32% | 34% | 27% | 26% | 26% | 26% | 20% | 23% |
| Net Profit | 324 | 156 | 124 | 172 | 232 | 237 | 246 | 326 | 318 | 338 | 173 | 329 |
| EPS in Rs | 2.61 | 1.26 | 0.99 | 1.35 | 1.73 | 1.77 | 1.86 | 2.27 | 2.18 | 2.29 | 1.23 | 2.04 |
| Div. Payout % | 0% | 0% | 0% | 4% | 6% | 0% | 8% | 8% | 9% | 9% | 8% | 10% |
Balance Sheet
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 124 | 124 | 124 | 124 | 127 | 128 | 128 | 137 | 138 | 144 | 144 | 153 |
| Reserves | 753 | 716 | 840 | 1,055 | 1,314 | 1,540 | 1,788 | 2,661 | 2,970 | 3,812 | 3,935 | 4,738 |
| Borrowings | 398 | 544 | 539 | 469 | 590 | 734 | 942 | 783 | 936 | 991 | 1,522 | 1,744 |
| Other Liabilities | 572 | 791 | 773 | 941 | 1,262 | 1,427 | 2,358 | 1,590 | 1,429 | 1,540 | 1,945 | 2,232 |
| Total Liabilities | 1,847 | 2,175 | 2,275 | 2,588 | 3,294 | 3,829 | 5,216 | 5,171 | 5,473 | 6,487 | 7,546 | 8,868 |
| Fixed Assets | 199 | 175 | 188 | 196 | 238 | 504 | 508 | 528 | 548 | 652 | 852 | 1,617 |
| CWIP | 4 | 1 | 2 | 10 | 86 | 34 | 36 | 108 | 268 | 469 | 602 | 85 |
| Investments | 272 | 57 | 50 | 55 | 60 | 58 | 41 | 55 | 70 | 194 | 158 | 135 |
| Other Assets | 1,373 | 1,943 | 2,035 | 2,327 | 2,911 | 3,233 | 4,631 | 4,480 | 4,586 | 5,172 | 5,935 | 7,031 |
| Total Assets | 1,847 | 2,175 | 2,275 | 2,588 | 3,294 | 3,829 | 5,216 | 5,171 | 5,473 | 6,487 | 7,546 | 8,868 |
Cash Flow
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 129 | 0 | 136 | 207 | 34 | 172 | 145 | 205 | 235 | -45 | 396 | -378 |
| Investing | -45 | 37 | -25 | -30 | -150 | -167 | -165 | -458 | -44 | -449 | -518 | -324 |
| Financing | -74 | -55 | -114 | -116 | 67 | -7 | 25 | 248 | -145 | 454 | 170 | 669 |
| Net Cash Flow | 10 | -18 | -3 | 61 | -49 | -1 | 5 | -5 | 46 | -40 | 47 | -33 |
| Free Cash Flow | 111 | -51 | 110 | 166 | -143 | 5 | 41 | 23 | -105 | -454 | -12 | -723 |
| CFO/OP | 54 | 12 | 103 | 102 | 15 | 53 | 30 | 41 | 54 | 13 | 89 | -44 |
Ratios
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 52 | 141 | 202 | 134 | 113 | 153 | 215 | 146 | 145 | 181 | 170 | 163 |
| Inventory Days | 259 | 192 | 140 | 56 | 41 | 96 | 65 | 98 | 113 | 135 | 145 | 161 |
| Days Payable | 320 | 307 | 260 | 148 | 134 | 227 | 262 | 173 | 131 | 141 | 174 | 115 |
| Cash Conversion Cycle | -9 | 26 | 81 | 42 | 20 | 22 | 18 | 72 | 127 | 175 | 141 | 210 |
| Working Capital Days | 75 | 112 | 134 | 84 | 62 | 91 | 70 | 85 | 124 | 163 | 179 | 212 |
| ROCE % | 36% | 24% | 13% | 18% | 24% | 21% | 20% | 19% | 15% | 13% | 8% | 11% |
Documents
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Company Information
HFCL Ltd (Himachal Futuristic Communications Limited) is a diverse telecom infrastructure enabler with active interest spanning telecom infrastructure development, system integration, and manufacture and supply of high end telecom equipment, Optical Fiber and Optic Fiber Cable (OFC).[1]