Synopsis:
A small cap telecom infrastructure stock is in focus after announcing their Q2 results and future outlook of the company.
A telecom equipment manufacturer company is in the spotlight following the announcement of its revenue and margin guidance for FY26 in their Q2 results. The article below provides a detailed overview of the company’s performance and future outlook.
With a market capitalization of Rs. 11,192.26 crore, the shares of HFCL Ltd, opened at Rs. 77.81, and had a previous close of Rs. 77.13. The stock had an intra-day high of Rs. 77.95 marking a gain of 1 percent from its previous close.
Q2 Results
HFCL Limited reported Rs. 1,043.34 crore in revenue for the second quarter of FY26, a 4.6 percent decrease over the Rs. 1,093.61 crore for the same period in FY25. But it increased by 19.78 percent as compared to Rs. 871.02 crore in Q1 FY26.
The company’s EBITDA for Q2 FY26 stood at Rs. 203.37 crore, up by 373.72 percent from Rs. 42.93 crore in Q1 FY26, and inclined by 18.36 percent from Rs. 171.82 crore in Q2 FY25.
The consolidated net profit for the second quarter of FY26 was Rs. 71.92 crore, which was 1.92 percent lower than the Rs. 73.33 crore reported in Q2 FY25, but it turnaround from a loss of Rs. 29.30 crore Q1 FY26. Profit decline was also reflected in earnings per share (EPS), which decreased to approximately Rs. 0.47 in Q2 FY26 from Rs. 0.51 in Q2 FY25.
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Revenue & Margin Guidance
The management expects a 20% year-on-year increase in revenue for FY26. In the Defence segment, it anticipates revenue of over ₹200 crore in FY26 and aims to surpass ₹500 crore in FY27. In the Passive Connectivity Solutions segment, the company projects revenue of around ₹400 crore in FY26 and approximately ₹900–1,000 crore in FY27.
Net profit margins in the Defence segment are generally higher than those in telecom products, averaging around 15%. Export margins are anticipated to be even stronger, ranging between 20% and 25%.
About the Company
HFCL Ltd (Himachal Futuristic Communications Limited) is a global technology and telecom infrastructure company with more than three decades of expertise in designing, integrating, and delivering advanced connectivity solutions.
The company’s portfolio spans telecom infrastructure development, system integration, and manufacturing of high-quality telecom equipment, optical fibers, and fiber optic cables, supporting diverse applications through innovation and international partnerships.
As one of India’s top optical fiber cable manufacturers, HFCL runs seven production units and three R&D centers, serving clients across more than 60 countries. The company has forged strong technology collaborations with global leaders such as Qualcomm, Wipro, NXP, and Capgemini Engineering to strengthen its product portfolio and drive innovation in the 5G ecosystem.
At the moment, the company’s P/E stands at 400x higher than the industry average of 18.7x. ROE and ROCE of 4.42 percent and 7.55 percent respectively, and the debt to equity ratio stands at 0.38, indicating the company’s financial performance.
Written by Akshay Sanghavi
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