1. At a Glance
Q1 FY26 net loss of ₹29 Cr. Yes, loss. OPM tanked to 3%. The stock is down 4%, and it’s still trading at 63x earnings. But wait—₹700 Cr fundraise, ₹2,500 Cr+ BharatNet orders, and capex in IBR cables suggest the company still thinks it’s on to something. We just don’t know what.
2. Introduction with Hook
HFCL is like that overachieving kid who shows up with 10 certificates, but forgot to pass the exam.
With big government orders, high-tech aspirations, and “Atmanirbhar” tattoos on every investor deck, HFCL should be a 5G darling. Instead, it just posted a ₹29 Cr quarterly loss and called a board meeting to raise ₹700 Cr. Yikes.
3. Business Model (WTF Do They Even Do?)
HFCL is your all-in-one telecom Swiss knife with ADHD. Here’s what they claim to do:
- OFCs and cables – they’re India’s top supplier
- Telecom gear – UBR radios, WiFi 6 APs, routers, 5G backhaul
- Defence electronics – thermal sights, fuzes, radars
- Aerospace + Auto – custom cable assemblies
- System Integration – BharatNet, Smart Cities, BSNL work
From BharatNet to Bharat Bandh, they’ve seen it all.
4. Financials Overview
Q1 FY26 Disaster Recap:
| Metric | Value (₹ Cr) | YoY Change |
|---|---|---|
| Revenue | 871 | -12.5% |
| Operating Profit | 28 | -84% |
| Net Profit | -29 | Loss |
| OPM | 3% | Down 12% |
| EPS | -₹0.22 | Down from ₹0.49 |
Margins collapsed like a tower without a base. Ouch.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹76 |
| P/E | 63.3x |
| Book Value | ₹28.3 |
| P/B | 2.69x |
Fair Value Range (Generous):
- P/E (20–25x FY26E EPS of ₹1.2): ₹24 – ₹30
- P/B (1.8–2.2x): ₹50 – ₹62
So yeah… market is baking in a tech re-rating, but financials are screaming “No cable connection.”
6. What’s Cooking – News, Triggers, Drama
- ₹2,500 Cr+ BSNL BharatNet Phase III orders signed
- ₹700 Cr fundraise approved (debt repayment + growth)
- Expanding IBR cable capacity with ₹125 Cr capex
- Multiple export wins and defence orders
- Oh, and office shifting to Haryana, in case that’s the turnaround event (spoiler: it’s not)
Plot twist: high topline visibility, but weak bottom line delivery.
7. Balance Sheet
| Item | Mar 2025 (₹ Cr) |
|---|---|
| Equity Capital | 144 |
| Reserves | 3,935 |
| Borrowings | 1,360 |
| Total Liabilities | 7,546 |
| Net Worth | 4,079 |
- D/E: ~0.33 — manageable
- But debtor days: 170 — borderline scary
- Inventory bloat + delayed project collections = a liquidity headache
8. Cash Flow – Sab Number Game Hai
| Year | Ops (₹ Cr) | Invest (₹ Cr) | Finance (₹ Cr) | Net Cash |
|---|---|---|---|---|
| FY23 | +235 | -44 | -145 | +46 |
| FY24 | -45 | -449 | +454 | -40 |
| FY25 | +396 | -518 | +170 | +47 |
Cash from ops is back, but investing needs are ballooning. This isn’t Capex-lite. It’s Capex-heavy with margin-light.
9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 4.31% |
| ROCE | 7.67% |
| OPM | 3% |
| Debtor Days | 170 |
| P/E | 63.3x |
If stress were a metric, this would be a 10/10. You don’t buy this for today—you buy it for a “tomorrow” HFCL is still building.
10. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | PAT (₹ Cr) | EPS (₹) |
|---|---|---|---|
| FY23 | 4,743 | 318 | 2.18 |
| FY24 | 4,465 | 338 | 2.29 |
| FY25 | 4,065 | 173 | 1.23 |
| TTM | 3,777 | 33 | 0.24 |
TTM PAT is practically gone. Unless those ₹2,500 Cr orders start converting, this might go from 5G to 5 Gone.
11. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Indus Towers | 30,122 | 9,931 | 10.6 |
| Vindhya Telelinks | 4,054 | 203 | 9.3 |
| Bondada Engg | 1,571 | 112 | 42.7 |
| HFCL | 3,777 | 33 | 63.3 |
Only company with 60x P/E and falling profits. Valuation hopes are doing all the heavy lifting here.
12. Miscellaneous – Shareholding, Promoters
| Category | Mar ’23 | Jun ’25 |
|---|---|---|
| Promoters | 39.24% | 31.58% |
| FIIs | 6.77% | 7.75% |
| DIIs | 2.78% | 14.04% |
| Public | 51.12% | 46.61% |
- Promoter stake down nearly 8% in 6 quarters
- DIIs ramping up
- 8.5 lakh+ retail shareholders still holding the line like it’s 2021 again
13. EduInvesting Verdict™
HFCL is a tale of big ambitions and even bigger execution delays. If they convert BharatNet & defence deals efficiently, they could bounce back. But with high debtors, collapsing margins, and a quarterly loss, you might want to hold the cheer.
“A wired opportunity—still waiting for a stable signal.”
Metadata:
Written by EduInvesting Team | 25 July 2025
Tags: HFCL Ltd, Telecom Infra, Optical Fiber, BharatNet, EduInvesting Premium
