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Optical Fibre Stock With ₹26,665 Cr Order Book and 40% Growth Guidance to Add to Your Watchlist

https://tradebrains.in/indian-markets/optical-fibre-stock-with-26665-cr-order-book-and-40-growth-guidance-to-add-to-your-watchlist-12446916

Optical Fibre Stock With ₹26,665 Cr Order Book and 40% Growth Guidance to Add to Your Watchlist

Optical fibre and data centre demand is creating fresh growth opportunities, with management targeting 40 percent plus revenue growth in FY27 as capacity expansion and new businesses scale up.

Optical Fibre Stock With ₹26,665 Cr Order Book and 40% Growth Guidance to Add to Your Watchlist

The article outlines the future outlook of the company, which is an Indian technology company that designs, develops, and manufactures high-end telecommunications equipment, optical fiber cables, and defense electronics

With a market capitalization of Rs 37,713 crore, HFCL Ltd’s share closed at Rs 246 per share, up by 4.45 percent from its previous close. The stock of the company gave a return of 252.42 percent over the last year

HFCL Limited, founded in 1987, is an Indian technology company engaged in designing, developing and manufacturing telecommunications equipment, optical fibre cables, defence electronics and connectivity solutions. The company serves telecom, digital infrastructure, defence and aerospace markets, with a growing focus on advanced optical connectivity and data centre solutions.

Financial Highlights

QoQ View: HFCL’s revenue from operations increased 4.98 percent QoQ to Rs 1,914.98 crore in Q1 FY27 from Rs 1,824.12 crore in Q4 FY26. EBITDA rose 32.16 percent to Rs 445.27 crore, while EBITDA margin improved to 23.25 percent from 18.47 percent. PAT grew 33.17 percent to Rs 245.64 crore, with PAT margin rising to 12.83 percent from 10.11 percent.

YoY View: Revenue from operations surged 119.85 percent YoY from Rs 871.02 crore in Q1 FY26, while EBITDA jumped 937.20 percent from Rs 42.93 crore. EBITDA margin expanded to 23.25 percent from 4.93 percent. PAT turned positive at Rs 245.64 crore from a loss of Rs 29.30 crore in Q1 FY26, resulting in a turnaround in profitability.

HFCL’s Record Order Book Growth

 HFCL Limited’s order book stood at Rs 26,665 crore in Q1 FY27, marking an all-time high and around 5 times its FY26 revenue. Optical fibre cable orders accounted for around Rs 16,000 crore, while the current defence order book stood at around Rs 300 crore and could rise to nearly Rs 2,300 crore including the proposed acquisition.

By category, products contributed Rs 17,339 crore or around 65 percent of the order book, followed by Operations and Maintenance at Rs 5,099 crore or 19 percent, while networks, including system integration and EPC, stood at Rs 4,227 crore or 16 percent. From a customer perspective, the private sector contributed Rs 16,164 crore or 60.6 percent, while the government sector accounted for Rs 10,502 crore or 39.4 percent.

HFCL has seen a sharp rise in its order book over the past three quarters. It increased from Rs 11,125 crore in Q3 FY26 to Rs 21,206 crore in Q4 FY26, before reaching Rs 26,665 crore in Q1 FY27. This reflects strong order inflows across its optical fibre, telecom, data centre and other business segments.

Major FY27 guidance and Capex

Management has raised its FY27 revenue growth guidance to 40 percent and above, compared with the earlier guidance of around 20 percent. It also expects the Q1 EBITDA margin of 23.25 percent to remain sustainable, with no major seasonality expected during the year.

The company expects quarterly revenue and profitability to remain broadly around Q1 levels, while leaving room for further improvement. This suggests that the strong Q1 performance is not being viewed as a one-off, but as a base for the remaining quarters of FY27.

For expansion, the company plans to invest around Rs 640 crore in FY27, followed by another Rs 615 crore in FY28. The planned capex will support preform and fibre capacity expansion, data centre connectivity, and defence-related investments, positioning the company for higher capacity and future demand.

Which Business Will Drive HFCL’s Future Growth?

Optical fibre and cable: HFCL is expanding its fibre capacity from 28 million to 34 million fibre km, while cable capacity is expected to increase from 34 million to 43 million fibre km. The expansion will help the company cater to rising demand from telecom and digital infrastructure.

Data centre business: Data centre connectivity capacity is set to increase five times, supported by growing demand from hyperscale data centres and cloud infrastructure. HFCL is targeting Rs 800 crore revenue from the segment in FY27, while its existing data centre orders already exceed Rs 850 crore.

Defence and aerospace: The defence business is expected to become another major growth driver, with management targeting Rs 500 crore revenue in FY27. The company expects combined Defence and Aerospace revenue to cross Rs 3,000 crore by FY29, supported by increasing investments in indigenous defence capabilities.

Strong demand outlook: Rising adoption of AI, hyperscale data centres, cloud computing and high-performance computing (HPC) is driving demand for optical fibre and connectivity solutions. Management expects this demand environment to remain strong for at least the next five years, supporting long-term growth across its key businesses.

Conclusion

HFCL’s growth outlook has strengthened, supported by a Rs 26,665 crore order book and management’s 40 percent FY27 revenue growth guidance. The expansion in optical fibre, data centre connectivity and defence businesses could support higher revenue and profitability as new capacity comes online.

For investors, the stock may suit those looking for long-term exposure to optical fibre, data centres, AI connectivity and defence. However, after the sharp rise in the stock, investors should focus on whether HFCL can deliver the guided growth, execute its large order book and sustain the strong margins seen in Q1 FY27.

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