HFCL Limited

HFCL reported robust Q3 FY26 consolidated revenue of ₹1210.79 crores, marking a 19.65% year-on-year increase from ₹1011.95 crores in Q3 FY25. EBITDA grew by 41.67% YoY to ₹243.52 crores, with the EBITDA margin expanding to 20.11%. Profit after tax also saw a significant jump of 41.04% YoY to ₹102.37 crores. This strong performance was attributed to improved OFC pricing, a favorable product mix, and a substantial increase in export contribution, which accounted for 27% of total revenues in Q3 FY26, up from 14% in Q3 FY25.

The company highlighted a sharp increase in demand for high-fibre-count, high-performance optical fibre cables, primarily driven by the massive expansion of hyperscale data centers globally. HFCL successfully developed a 3456-fibre Micro Duct IBR cable and is developing a 6912-fibre version, positioning itself among a limited set of global players. OFC realization increased to INR1,055 per fiber kilometer in Q3 FY26 from INR964 in the previous quarter, with management expecting a further increase of at least 10%.

HFCL is actively expanding its manufacturing capacities to meet rising demand. Optical Fibre Cable capacity is projected to increase from 30.5 mn fkm to 42.36 mn fkm by June 2026, with cable capacity enhancement expected to be completed by May/June 2026. Optical fiber capacity has already doubled from 14 mn fkm to 28 mn fkm, with an additional 6 mn fkm to be added by December 2026. These expansions are expected to drive higher volumes and revenues from Q4 FY26 onwards.

The company has initiated its Pre-Connectorised Solutions (PCS) business and commenced production of MPO cables, anticipating these interconnect solutions to contribute ₹400-500 crores each in additional revenues over FY26-FY27. In the defence sector, HFCL's electronic fuzes underwent firing trials in January 2026, with retesting expected in April for full approval. Management projects defence line of products to generate ₹400-500 crores in revenue for FY26-FY27 and aims for an electronic fuze capacity of 1 lakh units per annum.

HFCL's order book stood at a healthy ₹11,125 crores as of December 31, 2025, reflecting sustained order inflows. The revenue mix is shifting towards products, which constituted 60% of total revenues in Q3 FY26, up from 51% in Q2 FY26. While government orders contribute significantly to the order book (70%), private sector orders drive a larger portion of current revenues (80%) due to faster execution cycles. Management also noted that O&M revenues, particularly from the Army's NFS project, are expected to contribute ₹170 crores annually, growing to ₹450-500 crores per year in three years.

For the next financial year, HFCL expects its Fiber Optic Cable business revenue to cross INR3,500 crores, up from INR2,400 crores in the current year, while maintaining a PBT margin of around 10%. The company successfully completed a Qualified Institutions Placement of ₹550 crores to support capacity expansion, R&D, debt reduction, and working capital. Net debt currently stands at approximately INR1,500 crores. Management expressed willingness for promoters to increase their stake, subject to approvals.

The company faced logistical and execution challenges in early Q3 FY26 due to evolving tariff structures and trade realignments, leading to export shipment delays and demurrages. However, these issues stabilized from mid-December. Component availability constraints for routers were also noted, causing a temporary halt in taking new orders for this segment. Management is actively addressing these challenges and expects continued improved performance.