Fundamental Overview
*Business: HFCL manufactures optical fibre cables, telecom infra solutions, and 5G equipment. It is also expanding into defence manufacturing with 1,000 acres allotted in Andhra Pradesh.
*FY25 Results: Revenue slipped to ~₹4,064 Cr (down from ₹4,465 Cr in FY24), while net profit nearly halved to ~₹177 Cr. Q4FY25 posted a net loss (~₹81 Cr) due to weak OFC demand.
*Valuation: Currently trades at a P/E > 300x, indicating very high growth expectations are priced in.
*Balance Sheet:Debt-to-equity is comfortable at 0.28, liquidity healthy (current ratio ~1.87x).
*Guidance: Management expects 25–30% revenue growth in FY26, driven by strong order book and 5G product demand.
*Strengths: Exposure to 5G & defence, strong order book, low leverage.
*Risks: High valuation, weak recent earnings, promoter pledge (~54%), long receivable cycles.
Technical Setup
Pattern: Weekly chart shows a falling wedge, typically a bullish reversal pattern.
Reversal Zone: Price bounced from the ₹72–75 support band.
Key Level: A weekly close above ₹78 signals breakout strength.
Targets:
*Business: HFCL manufactures optical fibre cables, telecom infra solutions, and 5G equipment. It is also expanding into defence manufacturing with 1,000 acres allotted in Andhra Pradesh.
*FY25 Results: Revenue slipped to ~₹4,064 Cr (down from ₹4,465 Cr in FY24), while net profit nearly halved to ~₹177 Cr. Q4FY25 posted a net loss (~₹81 Cr) due to weak OFC demand.
*Valuation: Currently trades at a P/E > 300x, indicating very high growth expectations are priced in.
*Balance Sheet:Debt-to-equity is comfortable at 0.28, liquidity healthy (current ratio ~1.87x).
*Guidance: Management expects 25–30% revenue growth in FY26, driven by strong order book and 5G product demand.
*Strengths: Exposure to 5G & defence, strong order book, low leverage.
*Risks: High valuation, weak recent earnings, promoter pledge (~54%), long receivable cycles.
Technical Setup
Pattern: Weekly chart shows a falling wedge, typically a bullish reversal pattern.
Reversal Zone: Price bounced from the ₹72–75 support band.
Key Level: A weekly close above ₹78 signals breakout strength.
Targets:
- R1: ₹87
- R2: ₹100
- R3: ₹116
- R4: ₹130
Stop-Loss Zone: Below ₹72 (reversal zone invalidation).
Trading Idea
Swing Trade Setup: - Entry: Close above ₹78 with volume confirmation.
- Targets: ₹87 / ₹100 / ₹116 / ₹130.
- Stop-Loss: Below ₹72.
Investor View: Fundamentals are a mix of long-term growth drivers (5G, defence) and short-term earnings pressure. Best suited for accumulation near support zones, rather than chasing overvalued levels.
Conclusion
HFCL is at an inflection point. The fundamentals show sector tailwinds (5G + defence), but valuations and profitability remain a concern. Technically, a breakout above ₹78 from the falling wedge could align with management’s bullish FY26 guidance, opening the path toward ₹100+ in coming months.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.