HFCL shares locked in 5% lower circuit, down 21% in a month despite record Q2 profit: What lies ahead?
HFCL share price remained locked in the 5% lower circuit on Monday, 9 November, extending its recent decline despite the telecom equipment maker reporting its strongest-ever quarterly performance in Q2 FY27.
The stock has fallen 6.23% over the past week and 15.73% in the last two weeks. It has declined 21.14% over the past month and 1.01% in the past three months. However, the stock continues to trade significantly higher, with gains of 45.98% over six months and 199.10% on a year-to-date (YTD) basis.
The weakness comes despite a sharp improvement in the company's financial performance, with HFCL reporting a multi-fold increase in consolidated net profit for the September quarter, supported by strong demand for optical fibre cables from artificial intelligence (AI) data centres. The company has also outlined an ambitious growth outlook, backed by a sizeable order book and planned investments to expand manufacturing capacity.
HFCL reported a multi-fold jump in consolidated net profit to ₹394.22 crore in Q2 FY27, compared with approximately ₹72 crore in the corresponding quarter last year, according to its regulatory filing.
Consolidated revenue from operations more than doubled to ₹2,541.79 crore during the quarter, from ₹1,043.34 crore in the year-ago period. The company's profit after tax (PAT) margin also expanded sharply to 14.36% from 2.23% a year earlier.
The strong performance was driven by rising demand for optical fibre cables, particularly from AI data centres, alongside growing opportunities across telecom networks and data centre infrastructure.
Calling it the best-ever quarterly performance in HFCL's history, Managing Director Mahendra Nahata said the results reflected the growing scale, strength and momentum of the business. He added that the performance reinforced the company's confidence in delivering sustained growth and creating long-term value for stakeholders.
Building on the strong quarterly performance, HFCL has raised its growth ambitions, projecting revenue growth of at least 80% in FY27 compared with FY26.
Nahata said the company's order book exceeds ₹28,900 crore, providing multi-year revenue visibility. Beyond its secured orders, HFCL also has a strong pipeline of opportunities at advanced stages of conversion.
Demand is accelerating across AI infrastructure, hyperscale data centres and telecom networks, while opportunities with international hyperscalers and telecom operators are increasingly translating into firm contracts, he said.
The company had earlier targeted achieving ₹10,000 crore in revenue by FY29. However, supported by the current business momentum, management now believes it could reach the milestone significantly ahead of schedule.
To support its growth ambitions, HFCL plans to invest approximately ₹1,800 crore across optical fibre, cable and preform manufacturing. The investment is aimed at expanding production capacity, strengthening backward integration and improving its position in the growing data centre connectivity market.
Nahata said the company's advanced optical fibre cable portfolio and data centre connectivity solutions continue to strengthen its competitive position as demand for digital infrastructure expands.
Beyond its telecom and optical fibre businesses, HFCL is looking to build its defence and aerospace operations into another major growth engine.
Its defence portfolio includes thermal weapon sights, electronic fuzes, surveillance radars, Multi-Mode Hand Grenades and aerostructures.
Nahata said the ongoing acquisition of the aerospace business is expected to be completed during the current quarter, further strengthening the company's capabilities and presence in the sector.
HFCL remains on track to achieve its target of approximately ₹500 crore in defence revenue in FY27, he added.
With a sizeable order book, rising demand from AI data centres and an expanding defence portfolio, HFCL is positioning itself for its next phase of growth. However, the sharp correction in its share price, despite record quarterly earnings and an upbeat outlook, puts investor focus on the sustainability of its rally and the company's ability to convert its order pipeline into revenue and profitability.
HFCL share price today opened at an intraday high of ₹213.50 apiece on the BSE, the stock touched an intraday low of ₹206.05 apiece.
Gaurav Arora, Head of Research at SAHI, said HFCL has been forming potential bull-trap patterns on the weekly chart. He noted that the stock has repeatedly made higher highs during breakout attempts but failed to sustain those levels, subsequently slipping lower and trapping buyers.
Arora said the stock was down 5% and trading near a crucial support level of ₹200. A decisive break below this level could trigger further weakness, initially towards the ₹160–165 demand zone. The stock could also fill the price gap around ₹178–180 during the decline, he added.
Rajesh Bhosale, Technical Analyst at My Advisor Alpha, said HFCL has witnessed a sharp correction over the past couple of weeks and is now approaching a crucial support level of ₹200, which coincides with its previous swing low.
Bhosale cautioned that a break below ₹200 could lead to further downside towards ₹175. On the upside, ₹215 remains the immediate resistance level to watch, he said.
Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content.
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