Synopsis:
Himachal Futuristic Communications Limited (HFCL) in focus management’s announcement of a robust and promising future outlook.
A telecom equipment manufacturer company is in the spotlight today following the announcement of its revenue and capex guidance for FY26 in their Q1 results. The article below provides a detailed overview of the company’s performance and future outlook.
With a market capitalization of Rs. 10,628.17 crore, the shares of HFCL Ltd closed at Rs. 73.67 on Friday, up by 1.20 percent from its previous closing price of Rs. 72.80 per equity share.
What’s the News?
HFCL’s management expects annual revenue growth of 25-30%, driven by a strong order book and rising demand for its 5G products. The company plans to invest ₹250 crore in FY26 to support its growth.
Revenue Guidance
Management anticipates a 25% year-over-year increase in revenue for FY26. The Optical Fibre Cable (OFC) business is expected to double to around ₹2,400 crore in FY26 from ₹1,200 crore in FY25.
More than half of OFC revenue is expected to come from exports. Defence revenue is expected to be around ₹200 crore in FY26. The telco and telecom services segment is expected to generate ₹450 crore in revenue in FY26 and data center from PCS is expected to commence next year.
Order Guidance
As of June 30, 2025, the total order book stood at ₹10,480 crore, up from ₹9,967 crore in Q4 FY25 and ₹6,776 crore in Q1 FY25, indicating strong order inflows. Defence orders account for approximately ₹1,300 crore (~12% of total), primarily for tactical cables and thermal weapon sights.
Approximately ₹3,000 crore of the ₹10,000 crore order book is expected to be executed in FY26. The EPC segment has ₹6,400 crore of orders, with ₹1,000-1,200 crore expected to be executed this year. Export orders are valued at approximately ₹400 crore.
CAPEX Guidance
Capital expenditure for FY26 is expected to be around ₹250 crore, with ₹130 crore allocated for IBR cable capacity expansion and the rest for OFC and other investments. The board approved an enabling resolution to raise up to ₹700 crore, but there are no immediate fundraising plans. These funds would be used to support growth opportunities in the defence, telecom, and OFC sectors.
The board has approved a significant expansion of IBR cable capacity, increasing it from approximately 1.73 million fkm to around 19.01 million fkm per annum at the Hyderabad and Goa facilities. This expansion will also boost the total Optical Fibre Cable (OFC) capacity from roughly 25.08 million fkm to 42.36 million fkm per annum.
Margin Guidance
The company expects its Optical Fibre Cable (OFC) segment to maintain margins of approximately 15% beginning in Q2 FY26. The EPC segment is expected to generate margins ranging from 6% to 8%, with the possibility of higher profitability on BharatNet projects. Margins for telecom products are expected to vary depending on product mix and market conditions, with the previous quarter showing lower margins.
About the Company
HFCL Ltd (Himachal Futuristic Communications Limited) is a leading global technology and telecom infrastructure provider with over 30 years of experience designing, integrating, and delivering next-generation connectivity solutions. Its diverse portfolio includes telecom infrastructure development, system integration, and the production of high-end telecom equipment, optical fiber, and optical fiber cables, catering to a wide range of use cases through innovation and global collaboration.
As India’s leading optical fiber cable supplier, HFCL operates seven manufacturing facilities and three research and development centers, with a presence in over 60 countries. HFCL has established strong technology partnerships with leading global companies including Qualcomm, Wipro, NXP, Capgemini engineering and others to enhance its product offerings and innovation in the 5G space.
Financial Outlook
For Q1 FY26, the company’s revenue increased by 8.78% quarter-over-quarter, rising from Rs. 800.74 crore to Rs. 871.02 crore. However, on a year-over-year basis, revenue declined by 24.80%, down from Rs. 1,158.24 crore in Q1 FY25. Despite this, the company experienced a significant downturn in profitability, moving from a profit of Rs. 110.65 crore in Q1 FY25 to a loss of Rs. 29.30 crore in Q1 FY26.
At the moment, the company’s P/E stands at 292x higher than the industry average of 21.9x. ROE and ROCE of 4.31 percent and 7.67 percent respectively, indicates company’s financial performance. Its Debt to Equity ratio stands at 0.33.
Written by Akshay Sanghavi
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