HFCL Ltd Q3 FY26 Results: ₹1,211 Cr Revenue, 19% OPM, ₹10,410 Cr Order Book & a 203x P/E That Refuses to Blink
1. At a Glance – Blink and You’ll Miss the Drama
HFCL is that one telecom stock which looks like a boring infra supplier until you zoom in and realise it’s juggling telecom products, defence electronics, OFC cables, railways, exports, and a government-heavy order book — all at once. At ₹68.6, the stock is down ~33% YoY, market cap at ₹10,514 Cr, ROCE at a sleepy 7.55%, and ROE at 4.42%. And yet… it trades at a Stock P/E of ~203x. Yes, two-zero-three. Q3 FY26 revenue came in at ₹1,211 Cr (up ~20% YoY), PAT at ₹102 Cr, and EBITDA margin expanded to ~19% — a big jump from earlier quarters. Add to that a chunky ₹10,410 Cr order book, a recent ₹550 Cr QIP, and aggressive product pivoting… and suddenly this “telecom infra uncle” starts acting like a tech startup with a defence obsession.
But here’s the real tease: sales over 3 & 5 years are flat-to-negative, promoter holding is sliding, debt is rising, and cash flows are… moody. So is this a turnaround story, a margin mirage, or just another PSU-style order book illusion? Let’s open the files.
2. Introduction – HFCL: The Shape-Shifting Telecom Veteran
HFCL has been around long enough to have seen 2G scams, 4G rollouts, and now 5G hype cycles — and it’s still standing. That itself deserves a slow clap. Historically, HFCL was known as a project-heavy telecom EPC and OFC supplier, dependent on government tenders and lumpy execution. Margins were thin, working capital was stretched, and returns looked like government exam results — always “pass”, never “ranker”.
But over the last few years, management decided to change the script. Less project work. More products. More exports. More defence electronics. And more IP-led telecom gear like Wi-Fi access points, UBR radios, and AI-driven network management.
The result?
Telecom Products now 57% of 9M FY25 revenue (vs 43% in FY22)
Turnkey Services shrinking but still large
Defence reduced as a % of revenue, but expanding in capability
R&D spend jumping from 2% → 5% of revenue
Sounds great on paper. But HFCL’s financials still look like a company mid-gym-transformation: visible effort, patchy results, and lots of sweating.
3. Business Model – WTF Do They Even Do?
Think of HFCL as a telecom + defence hardware factory that also occasionally behaves like a government contractor.
Core buckets:
1) Telecom Products (the “cooler” part):
Wi-Fi 5/6 access points
UBR radios
Optical fibre & cables (largest market share in India)
Passive connectivity gear for data centres & FTTx
This segment is product-led, margin-friendly, and requires less working capital. Management wants this to be the future.
2) Turnkey Contracts & Services (the “cash-blocker”):
BSNL, Railways, rural telecom, fibre rollouts
Defence communication networks
EPC-style execution with milestone payments
This brings volume, but also high receivables and thin patience.
3) Defence & Aerospace (the “strategic flex”):
Electronic fuzes
Thermal weapon sights
Surveillance radars
Software-defined radios
Not massive in revenue yet, but very important politically and strategically.
In short: HFCL wants to be less L&T EPC, more telecom Bosch + mini-Bharat Electronics. Question: can margins and returns catch up before patience runs out?
4. Financials Overview – Numbers Don’t Lie, But They Do Smirk
Q3 FY26 Performance Table (₹ Cr)
Metric
Latest Qtr (Dec’25)
YoY Qtr (Dec’24)
Prev Qtr (Sep’25)
YoY %
QoQ %
Revenue
1,211
1,012
1,043
19.6%
16.1%
EBITDA
228
152
190
50.0%
20.0%
PAT
102
73
72
39.7%
41.7%
EPS (₹)
0.64
0.51
0.47
25.5%
36.2%
Annualised EPS (Q3 rule): Average of Q1–Q3 EPS × 4 ≈ ₹2.0–2.2 range.
And yet… the stock trades at ~200x trailing EPS. Why? Because FY25 full-year EPS collapsed to ₹1.23, and TTM is even worse (₹0.33).
So yes, margins improved. But investors are still pricing hope, not history.
