HFCLNSEFinancial Year 2025-26August 01, 2025

HFCL Limited

9,831words

150turns

12analyst exchanges

5executives

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Management on call

Mahendra Nahata

PROMOTER AND MANAGING DIRECTOR

Vijay Raj Jain

CHIEF FINANCIAL OFFICER,

Manoj Baid

COMPANY SECRETARY

Amit Agarwal

HEAD OF INVESTOR RELATIONS

Mohit Lohia

ICICI SECURITIES

Key numbers — 40 extracted

82%

rollout has made phenomenal progress. In just 22 months since launch, 5G services now cover over 82% of the population, with more than 4,70,000 5G sites installed. While rural 5G coverage is still i

₹300 crore

remain a key growth engine for HFCL. During Q1 FY26, we secured export orders worth approximately ₹300 crores and achieved export revenues of around ₹210 crores . This quarter also marked the onboarding of

₹210 crore

, we secured export orders worth approximately ₹300 crores and achieved export revenues of around ₹210 crores . This quarter also marked the onboarding of several reputed global customers, along with repeat

rs,

of around ₹210 crores . This quarter also marked the onboarding of several reputed global customers, along with repeat orders reflecting strong customer satisfaction and trust in our offerings. We ob

1.73 million

ctors, in its meeting held on 11th July, 2025, approved the expansion of IBR cable capacity from ~1.73 million fiber kilometers per annum to ~19.01 mn fkm /per annum at our Hyderabad and Goa facilities. This

25.08 million

this planned expansion, our total optical fibre cable manufacturing capacity will increase from ~25.08 million fibre kilometers to ~42.36 million fibre kilometres per annum, significantly enhancing our abilit

42.36 million

optical fibre cable manufacturing capacity will increase from ~25.08 million fibre kilometers to ~42.36 million fibre kilometres per annum, significantly enhancing our ability to serve both domestic and inte

₹650 crore

rld traffic conditions, successfully validating their capabilities. HFCL has secured orders worth ₹650 crore for routers under the BharatNet Phase III program and expects to receive significant ad

₹175 crore

ur offerings across 5G, and enterprise connectivity. Recently, we secured a repeat order worth ~₹175 crore for our indigenous 5G networking equipment, underscoring our ‘Make in India’ capabilities. In t

₹90 crore

adherence to stringent defence quality standards. Additionally, we are declared as L1 bidder in a ₹90 crore tender for tactical cables, which are deployed by the Army in battlefield conditions. These cable

₹10480 crore

rtunities in coming quarters. Driven by these wins, our order book as of June 30, 2025, stands at ₹10480 crore, compared to ₹9967 crore in the previous quarter and ₹6776 crore in Q1FY25 Let me now highlight

₹9967 crore

. Driven by these wins, our order book as of June 30, 2025, stands at ₹10480 crore, compared to ₹9967 crore in the previous quarter and ₹6776 crore in Q1FY25 Let me now highlight our financial performance

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Guidance — 20 items

Mohit Lohia

opening

“As we step in FY26, India continues its strong momentum as a hub for digital innovation and self-reliance.”

Mohit Lohia

opening

“Q1 FY26 marked a strong and encouraging start to the year, with healthy momentum across our key verticals—Telecom, Optical Fibre Cables, Passive Connectivity Solutions, and Defence.”

Mohit Lohia

opening

“This renewed momentum, beginning in Q1 FY26, has enabled our manufacturing facilities to operate at optimal levels.”

Mohit Lohia

opening

“The increase in business activity has translated into consistent and efficient plant operations, marking a notable improvement from the muted performance observed up to Q4 FY25.”

Mohit Lohia

opening

“During Q1 FY26, we secured export orders worth approximately ₹300 crores and achieved export revenues of around ₹210 crores .”

Mohit Lohia

opening

“With the unprecedented increase in hyperscale datacentres, we anticipate a sharp surge in the requirement for high-count fibre cable, particularly Intermittently Bonded Ribbon (IBR) cables, over the next few years.”

Mohit Lohia

opening

“With the strong traction we are experiencing particularly from international customers, we are confident that our Optical Fibre Cable business is poised to more than double its revenue in FY26 compared to FY25.”

Mohit Lohia

opening

“We expect to have significant increase in revenue from passive connectivity solutions business with data centers also.”

Mohit Lohia

opening

“• Revenue stood at ₹871.02 crore, compared to ₹800.72 crore in Q4 FY25 and ₹1158.24 crore in Q1 FY25.”

Mohit Lohia

opening

“• EBITDA stood at ₹42.93 crore, compared to ₹-22.33 crore in Q4 FY25 and ₹185.37 crore in Q1 FY25.”

Risks & concerns — 1 flagged

Is there any technology transfer risk with partners like DRDO?

— Balasubramanian A.

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Q&A — 12 exchanges

Good evening, sir. Thank you so much for the opportunity. Sir my first question regarding data center. I think data center networking, total addressable market, it's more than $1 trillion over the next four to five years' time. I just want to understand like how we differentiate ourselves in terms of data center networking compared to our competitors? Because one of our competitors already making more than 20% of revenue from data center side only, so if you could share more light on that industry side and our company capability side.

Mahendra Nahata

Thank you, Mr. Balasubramanian. World market for data centers is very, very large. Right now with the kind of hyperscalers are coming up all over the world, particularly in North America and Europe, unprecedented growth, which we could not have imagined probably six months ago. Now these data centers need different kind of products, servers and those kind of large capacity switches, which we do not manufacture. But we supply to them with high-capacity fiber optic cables and also the passive connectivity solution product portfolio, which we are building now revenue from them would start in may

Sir, first, can you bifurcate the defense order book and export order book out of total order book? Like how much is for defense and how much is for export?

Mahendra Nahata

Look, our export order book, just give me a moment, our export order book today is above Rs. 400 crores. It's roughly about Rs. 400 crores. And from defense segment, would be roughly about 12% of our total order book, which is Rs. 10,000 crores, the defense is about Rs. 1,300 crores, about give or take a couple of crores. Okay. And for defense, like which product is the highest contributing in order book, like for which product we are getting highest order? Look, defense tactical cable is the highest portion, tactical cable followed by thermal weapon sight. And operation and maintenance contra

Yes, sir. Sir, just wanted to understand, since you are saying that the demand is back again for the fiber optical cables, when are these margins expected to be in the similar lines what we have seen in the last year, which were around 14%, 15%? Just wanted your views on this.

Mahendra Nahata

From this quarter itself. In fact, from July which was the last month of the Q1, we started into that kind of a margin. And from this margins would continue to be of that level of roughly about 15% or so. Currently, whatever orders we are executing, most of them are in that range of margin. Okay. And this margin reduction was purely due to the demand issue? Or was it something else also? So really, the decrease in margin was because of low demand. Once you have low demand and the capacity utilization is lower with the manufacturers, they tend to start selling at a lower price, which is normal.

Thank you for allowing me to ask questions. I just had two questions. Sorry, I joined the call a bit late, I might have missed it. So what is the capacity utilization of optic fiber?

Mahendra Nahata

In our optical fiber, we are working at 100% capacity for optical fiber. Optical fiber cable, the capacity utilization has started improving in the first quarter. Particularly May, June it really started improving. July it has further improved and now reaching to almost 100%. Okay. Understood. Sir, last question. Just wanted a status update on Delhi NCR factory and the revenue potential from that factory? The CAPEX? Say that again, I could not hear you. Just wanted to know the progress on the Delhi NCR factory for Telco and the revenue potential from that? Okay. We have already started produci

Hi, sir. Sir, I just want to understand what is the contribution of optical fiber cable in our total revenue mix? And how much is it part of your order book?

Mahendra Nahata

Yes. As far as order book is concerned, of the fiber optic cable, you have to understand, they keep on coming. It never comes into a big number by once itself. It keeps on coming. You supply for Rs. 50 crores, you get another order of Rs. 50 crores on the same customer. So it comes like that. But in the total products, which we have total products, about 65% of the product revenue is from optical fiber cable. Understood, sir. Sir, my next question is you are talking about like passive solutions for telecom and defense. Could you just expand on that, sir, because I am not able to get that is it

Yes, sir. Sir, just one question. What is the succession planning sir?

Mahendra Nahata

Succession planning. Sir, I am still young enough. Yes, sir, and we hope that for the next many years we see you. But just as shareholders, I just want to know about if there is any succession planning. In succession planning, we want to completely professionalize the company that it would be run by professional CEOs and professional business heads. Already, company is run by business heads for different business verticals. But in future, we expect shareholders to just play the shareholders' role and company run by professional CEOs. That is the way we are planning now. Sir, none of the next g

Sir, firstly, when we look at our consolidated revenue for the telecom product, although the revenue rises, there is a revenue increase by Rs. 92 crores, the contribution to the profitability is 30%, that is Rs. 29 crores. So what goes into this telecom products specifically when we consolidate our numbers?

Mahendra Nahata

Telecom products, one is, of course, the fixed wireless access terminal, which we have produced; the unlicensed band radios, which we have produced. So these are some of the typical telecom products which produce and where we have a lower profit margin. And the profit margin, fiber optic cable, which is also part of the product revenue only, has been higher, much higher, as I said about 15% or so. But then the telecom electronic products, the margin has been lower. So this is how it is. Okay. Sir, we have also seen the promoter stake also coming down over the last 2 financial years. That is th

I am concluding, please allow me to conclude ma'am.

Mahendra Nahata

Go ahead, Mr. Saket. Sir what I was trying to understand is, for the year as a whole, turnkey business, that is the EPC part, how will that will be shaping up and whether the bottom line will be positive or negative? What I am saying Mr. Saket, overall, we can look for about 25% growth in the revenue. Overall, that is what our best estimate is that there should be 25% growth in the revenue of the company in the current financial year. Now how much it will grow in EPC, how much it will grow in defense or products? Very difficult to say. But at least EPC will grow. And also, I can tell you, fibe

Thanks for the opportunity. Sir, my first question is, what is our Hosur defense facility utilization right now? And what do we target by the end of this year?

Mahendra Nahata

Defense has just started, Nikhil, it just started. So I wouldn't say there is any percentage to that. So Q2, we would be producing this thermal weapon sights there. Multimode hand grenade if we get order, we will not be producing there because right now, we do not have a license for explosives. Once we get explosive license, we like to produce at a different facility, not at this place. So it is just starting. So I won't put a number at this point of time to that. Okay, not for the end of the year as well, right? No, not at the end of the year. Not at this point of time. But yes, may be next q

Thank you for the opportunity. Just wanted to have your understanding on, last financial year we did a revenue of Rs. 4,064 crores, and this quarter we are at Rs. 871 crores or Rs. 869 crores, something like that. So if we assume 25% growth rate, we have to do somewhere around Rs. 4,200 crores in this nine-month period, which is approximately Rs. 1,400 crores per quarter. So are we on it?

Mahendra Nahata

Yes, we are on it. I am not saying that the Q2 would be Rs. 1,400 crores. So Q2 would definitely be better than the Q1. And every quarter, we will increase. And I am quite confident that 25% increase in the revenue would be there. Looking at the order book itself and the kind of orders we are receiving, we should be able to reach, out of the Rs. 10,000 crores, Rs. 3,000 crores should be executable in this year itself. Then there will be more orders coming up in the current financial year. So I do not have any reason to believe that it would not increase by 25%. And Q2, can we expect Q2 to be p

So out of order book of Rs. 10,000 crores, how much is from EPC?

Mahendra Nahata

I will tell you. Just give me a second. Out of that, about Rs. 6,400 crores would be for EPC. And how much are you expecting it to convert it into the realization in this year? Look, out of the total Rs. 10,000 crores, I am saying about Rs. 3,000 crores will be converted into this year. Now out of EPC of Rs. 6,494, I would say Rs. 1,000 crores, something like Rs. 1,000-Rs.1,200 crores should be convertible. Okay. So, which means around Rs. 1,000 crores would be from our products. Out of this Rs. 10,000 crores, but there will be more orders coming in. Okay. And sir, on the optical fiber cable,

Thank you very much to all the investors and the participants on the call. And I really appreciate your time and effort you have made in joining our call, and thank you very much. Thanks a lot.

Management

Speaking time

Mahendra Nahata

Moderator

Saket Kapoor

Nikhil Purohit

Deepesh Sancheti

Darshil Pandya

Lakshmi Narayanan

Siddhant Singh

Balasubramanian A.

Abhishek

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Opening remarks

Mohit Lohia

Yes. Thank you, Shruti, and good evening, everyone. Thank you for joining us today for the Q1 FY '26 call of HFCL Limited. First of all, I would like to thank Management for providing us the opportunity to host the call. From the Management side, we Mr. Mahendra Nahata – Promoter and Managing Director, Mr. Vijay Raj Jain – Chief Financial Officer, Mr. Manoj Baid – Company Secretary, and Mr. Amit Agarwal – Head of Investor Relations. So without further delay, I will now hand over the call to Mr. Nahata for opening remarks. Thank you, and over to you, sir. Mahendra Nahata: Good evening, ladies and gentlemen. I extend a warm welcome to all of you on HFCL’s earnings call for the first quarter of FY26. I trust you have had the opportunity to review our financial results, press release, and investor presentation, which are available on our website and the stock exchanges. As we step in FY26, India continues its strong momentum as a hub for digital innovation and self-reliance. The Government

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