HFCL
HFCL
TelecomKey Fundamentals
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Key Insights
Strengths
1- Company is expected to give good quarter
Weaknesses
6- Stock is trading at 7.46 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 6.82% 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: -9.55%
Growth Rate
AI Analysis — Bull vs Bear
HFCL Ltd has a market capitalisation of about ₹32,755 crore and trades at a P/E of 53.7 and a P/B of 6.63. Over the trailing twelve months, sales grew 59% and profit rose 1,591%, but over the longer term sales compounded at only 2% over 5 years and 1% over 3 years, and 3-year ROE averaged about 7%. The stock has returned 193% over one year and 30% CAGR over 10 years. That strong price performance sits alongside weak long-term operating fundamentals, 163 debtor days and an 11% fall in promoter holding over three years.
- Trailing twelve-month sales grew 59%, well above the 5-year sales CAGR of 2%, which suggests a sharp pickup in order execution and revenue recognition.
- Trailing twelve-month profit grew 1,591%, which points to strong operating leverage as revenue picks up, though this is off a low base.
- The stock has returned 193% over one year, 41% CAGR over three years and 30% CAGR over ten years, a long record of rewarding shareholders on price.
- 10-year average ROE of 10% is higher than the current 7%, which suggests returns could recover toward past levels if the TTM growth lasts.
- The company is expected to report a good quarter, which may confirm that the 59% TTM sales growth is continuing rather than a one-off.
- A 10-year sales CAGR of 6% and profit CAGR of 3% show the business has grown through telecom capex cycles, and the TTM surge suggests exposure to the current cycle.
- A market cap of about ₹32,755 crore gives the company enough scale and investor visibility to compete for large telecom and defence-related contracts.
- The stock trades at 6.63 times book value while ROE is only about 7%. That is a high price for the returns the business currently generates on equity.
- A P/E of 53.7 prices in continued high growth, yet 3-year sales and profit CAGRs are each only 1%, so the valuation depends heavily on the recent TTM surge holding up.
- Sales grew only 2.27% a year over the past five years, which shows weak long-term revenue growth despite telecom capex cycles.
- Debtor days of 163 point to heavy working-capital needs and a risk of delayed collections from telecom and government clients.
- Promoter holding fell 11.0% over the last three years, which some investors may read as reduced promoter commitment.
- The 3-year average ROE of 6.82% is likely below the company's cost of equity, so capital efficiency is weak.
- Dividend yield is 0.09% and the 3-year payout ratio is 8.89%, so shareholders get very little cash return and depend almost entirely on price gains.
- The 1,591% TTM profit growth comes off a low base. With the 5-year profit CAGR at only 5%, recent earnings may not be a reliable guide to what is sustainable.
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
- Shares slide on profit booking Sep 15
HFCL fell up to about 5% on September 15, touching an intraday low of ₹222.55 and trading at ₹223.9 (down 4.19%) after the capex announcement. Around 12.77 lakh shares traded, and the stock is down over 9.44% in a week.
- Stretched valuation multiples Sep 7
The stock trades at a P/E of 61.87 and a P/B of 7.16 after a 224-252% rally in 2026. That leaves little room for execution misses.
- Capex funding and dilution risk Sep 14
Total planned capex rises to about ₹1,800 crore, funded partly by bank and institutional borrowings and by promoter warrant proceeds. The current debt-equity ratio is 0.35.
- Long capex gestation period Sep 14
The new OF/OFC capacity is due only by July 2028 and the ₹670 crore preform plant by October 2028. Revenue benefits are therefore 2+ years out.
- High volatility, sharp drawdowns Sep 7
The stock lost 13% over four sessions before its September 7 rebound and remains below its 52-week high of ₹256.70. Price swings stay sharp.
- Record Q1 FY27, guidance doubled Sep 14
Q1 FY27 consolidated profit hit a record ₹245.64 crore, against a ₹29.3 crore loss a year earlier, as revenue more than doubled to ₹1,914.98 crore. FY27 revenue growth guidance was raised to 40% from 20%.
- ₹820 cr optical capacity expansion Sep 14
The board approved ₹820 crore more capex (₹670 crore preform, ₹150 crore OF/OFC). This takes capacity to 43.10 Mn fkm of optical fibre, 62 Mn fkm of OFC and 600 MT of preform per annum.
- Order book jumps 113% Sep 7
The FY26 order book reached ₹21,206 crore, up 113% year on year, and the OFC and connectivity order book stands at about ₹19,000 crore. That gives strong revenue visibility.
- $244M global OFC export order Sep 7
HFCL signed a three-year deal worth about $244 million (₹2,329 crore) to supply optical fibre cable to a global MNC on September 1. Its export and hyperscale data centre exposure is growing.
- Strong FY26 earnings growth Sep 7
FY26 revenue rose 21.77% to ₹4,949.27 crore, EBITDA grew 63.15% to ₹826.75 crore and PAT climbed 90.14% to ₹329.44 crore. RoCE improved to 11.04%.
- Upper circuit in weak market Sep 7
Shares hit the 5% upper circuit at ₹243.01 even as the Nifty 50 fell 0.33%, ending a four-day losing streak. The stock is up 252% in 2026 against a 9% fall in the Nifty.
- AI data centre, defence push Sep 7
HFCL is investing ₹215 crore in an AI data centre connectivity solutions plant while scaling up its defence and aerospace business through indigenous technology and acquisitions.
- 39th AGM concluded virtually Sep 29
The 39th AGM was held on September 29, 2026, after being announced on September 3. Shareholders adopted the FY26 financials and approved related party transactions with HTL Limited.
- Heavy investor outreach calendar Sep 25
HFCL held September meetings with Jefferies, Nomura and Arihant Capital, an analyst meet on September 18, and the Goldman Sachs India Hidden Gems event on September 30.
- FY26 BRSR filed Sep 5
HFCL submitted its FY26 Business Responsibility and Sustainability Report to the exchanges. It covers environmental metrics, governance and CSR.
TL;DR: HFCL's fundamentals are strengthening fast: Q1 FY27 brought a record ₹245.64 crore profit, revenue more than doubled, FY27 growth guidance doubled to 40%, and the order book stands at ₹21,206 crore, helped by the $244 million export win and hyperscale data centre demand. The main risks are a stretched valuation (P/E ~62) after a 200%+ rally this year, high volatility (down 9.44% in a week in mid-September), and a ₹1,800 crore capex program partly funded by debt that won't add capacity until 2028. Earnings momentum is improving clearly, but the price is consolidating after a big run. Near-term direction likely depends on keeping up quarterly execution on the 40% guidance and converting the order book into revenue.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 995 | 1,111 | 1,032 | 1,326 | 1,158 | 1,094 | 1,012 | 801 | 871 | 1,043 | 1,211 | 1,824 | 1,915 |
| Expenses | 849 | 979 | 916 | 1,130 | 984 | 935 | 860 | 838 | 843 | 853 | 983 | 1,510 | 1,501 |
| Operating Profit | 146 | 133 | 117 | 196 | 175 | 158 | 152 | -37 | 28 | 190 | 228 | 314 | 414 |
| OPM % | 15% | 12% | 11% | 15% | 15% | 14% | 15% | -4.6% | 3.3% | 18% | 19% | 17% | 22% |
| Other Income | 13 | 18 | 47 | 14 | 10 | 15 | 21 | 14 | 15 | 13 | 17 | 22 | 31 |
| Interest | 36 | 35 | 37 | 40 | 42 | 45 | 47 | 51 | 56 | 61 | 63 | 63 | 62 |
| Depreciation | 21 | 21 | 19 | 20 | 24 | 25 | 26 | 30 | 32 | 36 | 44 | 45 | 51 |
| PBT | 103 | 94 | 108 | 149 | 119 | 102 | 100 | -105 | -45 | 106 | 138 | 228 | 332 |
| Tax % | 26% | 25% | 24% | 27% | 7% | 28% | 28% | -21% | -34% | 32% | 26% | 19% | 26% |
| Net Profit | 76 | 70 | 82 | 109 | 111 | 73 | 73 | -83 | -29 | 72 | 102 | 184 | 246 |
| EPS in Rs | 0.49 | 0.49 | 0.58 | 0.76 | 0.77 | 0.51 | 0.51 | -0.56 | -0.22 | 0.47 | 0.64 | 1.17 | 1.49 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | 5,993 |
| Expenses | 2,272 | 2,600 | 1,944 | 2,944 | 4,320 | 3,346 | 3,873 | 4,077 | 4,125 | 3,884 | 3,615 | 4,186 | 4,847 |
| Operating Profit | 281 | 273 | 187 | 283 | 418 | 493 | 550 | 650 | 619 | 582 | 449 | 764 | 1,146 |
| OPM % | 11% | 10% | 9% | 9% | 9% | 13% | 12% | 14% | 13% | 13% | 11% | 15% | 19% |
| Other Income | 110 | -29 | 21 | 24 | 40 | 22 | 31 | 37 | 47 | 102 | 58 | 63 | 83 |
| Interest | 44 | 62 | 62 | 64 | 92 | 115 | 175 | 166 | 152 | 147 | 185 | 242 | 249 |
| Depreciation | 34 | 26 | 22 | 23 | 27 | 42 | 69 | 78 | 83 | 82 | 106 | 157 | 176 |
| PBT | 312 | 156 | 124 | 220 | 339 | 358 | 337 | 442 | 431 | 454 | 217 | 428 | 804 |
| 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 | 604 |
| 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 | 3.77 |
| Div. Payout % | 0% | 0% | 0% | 4% | 6% | 0% | 8% | 8% | 9% | 9% | 8% | 10% | — |
Balance Sheet
| Particulars | 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 | 1,896 |
| Other Liabilities | 572 | 791 | 773 | 941 | 1,262 | 1,427 | 2,358 | 1,590 | 1,429 | 1,540 | 1,945 | 2,080 |
| 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 | 1,216 |
| CWIP | 4 | 1 | 2 | 10 | 86 | 34 | 36 | 108 | 268 | 469 | 602 | 486 |
| 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
| Particulars | 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
| Particulars | 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 | 191 |
| Days Payable | 320 | 307 | 260 | 148 | 134 | 227 | 262 | 173 | 131 | 141 | 174 | 136 |
| Cash Conversion Cycle | -9 | 26 | 81 | 42 | 20 | 22 | 18 | 72 | 127 | 175 | 141 | 218 |
| Working Capital Days | 75 | 112 | 134 | 84 | 62 | 91 | 70 | 85 | 124 | 163 | 179 | 208 |
| ROCE % | 36% | 24% | 13% | 18% | 24% | 21% | 20% | 19% | 15% | 13% | 8% | 11% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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64 extracted metrics + investor summaries across FY10–FY27.
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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]
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