HFCL Q1 Results: Multibagger of 2026 surges after profitability returns, sharp margin expansion

HFCL Ltd reported its strongest-ever quarterly performance for the June quarter (Q1FY27) on Wednesday, with revenue more than doubling and the company returning to profitability on the back of surging exports, an improved product mix and stronger operating leverage.

The telecom equipment and optical networking company posted a consolidated net profit of ₹228.6 crore, compared with a loss of ₹32.2 crore in the year-ago period. Revenue climbed 120% year-on-year to a record ₹1,915 crore, while EBITDA surged to ₹414 crore from ₹29 crore a year earlier. EBITDA margin expanded sharply to 21.6%, from 3.3% last year.

Following the earnings announcement, shares of HFCL climbed as much as 6.5% to an intraday high of ₹228 on the NSE, recovering from the day's low of ₹214.11.

Exports and products power record quarter

The company attributed the strong performance to robust demand from hyperscale data centres, improved product realisations, operating leverage and rising global demand for optical connectivity solutions.

Exports emerged as a key growth driver during the quarter, contributing ₹1,063.3 crore, or 55.5% of total revenue, compared with ₹209.7 crore, or 24.1%, a year ago.

HFCL's product business continued to dominate its revenue mix, accounting for 85% of total revenue, compared with 66% in the corresponding quarter last year. The company also reported its highest-ever order book of around ₹26,665 crore, providing strong revenue visibility and representing nearly five times its FY26 revenue.

Buoyed by the strong start to the financial year, HFCL revised its FY27 revenue growth aspiration to 40%, higher than its earlier expectations.

₹215 crore AI connectivity investment approved

The Board also approved an investment of ₹215 crore to establish a manufacturing facility for advanced AI data centre connectivity solutions, as the company looks to capitalise on rising investments in artificial intelligence, cloud infrastructure and next-generation telecom networks.

HFCL said its capacity expansion programme remains on track, with optical fibre capacity set to increase from 28 million fibre kilometres to 34 million fibre kilometres, while optical fibre cable capacity will rise from 34 million fibre kilometres to 43 million fibre kilometres. The company is also progressing with a greenfield preform manufacturing facility as part of its backward integration strategy.

Commenting on the results, Managing Director Mahendra Nahata said the convergence of AI, digital infrastructure, optical connectivity and defence modernisation is creating significant long-term opportunities for the company. He added that HFCL's expanding manufacturing capabilities, technology portfolio and global presence position it well to deliver sustainable long-term growth.