Q2 FY27 · NSE: HFCL

HFCL

Results filed 19 October 2026 · Market cap ₹35,401 crore · PE 40.8

GrowthGuidance raisedTranscript read

Revenue: +143.6%; on a year ago
EBITDA: +231.3%; on a year ago
Profit to shareholders: +434.8%; on a year ago
EBITDA margin: 24.8%; +3.2 pts on last quarter

HFCL reported record Q2 FY27 consolidated revenue of ₹2,541.79 crore (up 143.6% YoY) and PAT of ₹394.22 crore (up 448.1% YoY), propelled by specialized optical fiber cable exports to hyperscalers. Backed by a ₹28,911 crore confirmed order book, management upgraded its FY27 revenue growth guidance to at least 80% while committing to ₹1,800 crore in backward integration and capacity capex. However, the EPC turnkey division posted a widening quarterly loss of ₹122.58 crore due to unbilled milestone delays on BharatNet, prompting an ongoing board restructuring review.

HFCL Limited, Q2 FY27₹ crore, consolidated

	Q2 FY27	Q1 FY27	vs previous quarter	Q2 FY26	vs a year ago
Revenue	2,542	1,915	+32.7%	1,043	+143.6%
Operating profit (EBIT)	577	363	+59.0%	154	+273.6%
Operating margin	22.7%	18.9%	+374 bps	14.8%	+789 bps
Other income	27.46	31.15	−11.8%	13.04	+110.6%
Exceptional items	0	0	–	0	–
Profit before exceptional items and tax	539	332	+62.6%	107	+405.9%
Profit to shareholders	363	229	+58.8%	67.86	+434.8%
Share of joint ventures' and associates' profit	−0.34	−0.02	n.m.	−0.2	n.m.
Earnings per share (₹)	2.37	1.49	+59.1%	0.47	+404.3%

Source: HFCL Limited’s filing to NSE, 19 October 2026. Operating profit is revenue less every expense except interest, so it leaves out other income and exceptional items. n.m.: not meaningful, because the earlier figure was zero or negative, or the latest one is a loss.

What stood out

Net profit surged more than fivefold YoY driven by hyperscaler AI data center demand and higher product pricing.
Source
Consolidated profit after tax in Q2 FY27 reached ₹394.22 crore compared to ₹71.92 crore in Q2 FY26, up 448.14% YoY (Press Release p. 1; MD Mahendra Nahata, Concall p. 2).
Full-year FY27 revenue growth guidance raised aggressively to at least 80% (up from 20% at start of year and 40% post Q1).
Source
"After the first quarter, we revised it to 40%, and today... we expect revenue growth of at least 80% in this financial year." (MD Mahendra Nahata, Concall p. 3-4).
Persistent losses in the Turnkey Contracts/EPC segment due to delayed billing milestones on BharatNet and pending AMC approvals.
Source
Turnkey Contracts and Services segment reported a loss before tax and interest of ₹122.58 crore in Q2 FY27 vs ₹35.92 crore profit in Q2 FY26 (Financial Results Segment Report, p. 6; Concall p. 10-11).

Guidance

Metric	Guidance	Period
FY27 Revenue Growth Source Press Release p. 1; Concall p. 4.	At least 80% growth over FY26	FY27
Long-term Revenue Milestone Source Press Release p. 2; Presentation p. 4.	₹10,000 crore revenue milestone expected to be achieved much earlier than FY29	Before FY29
EBITDA Margin Source Presentation p. 18.	Expand from ~16.7% in FY26 to >27% by FY29	FY29
Defence & Aerospace Revenue Source MD Mahendra Nahata, Concall p. 7.	₹500 crore to ₹600 crore in FY27, at least ₹2,000 crore in FY28, and aspiration of ₹5,000 crore in 3 years	FY27-FY30
Connectivity Solutions Revenue Source MD Mahendra Nahata, Concall p. 9, 20.	₹800+ crore in FY27 and ₹2,000 crore in FY28	FY27-FY28
EPC Segment Losses Source MD Mahendra Nahata, Concall p. 11.	Losses over next two quarters combined will be restricted to ₹75-100 crore, turning profitable in Q1 FY28	H2 FY27 - Q1 FY28

Revenue growth guidance raised significantly from 40% post-Q1 to at least 80% in Q2 FY27.

Tailwinds

Hyperscaler demand and export surge for specialized data center interconnect cables.
Source
Exports grew approximately 493% YoY; order book reached ₹28,911 crore with 57% from exports and 64% from OFC/DCI (Presentation p. 10; Concall p. 3).
Significant realization premium and higher pricing on advanced data center fiber products.
Source
A2 180-micron data center fiber commands ~$25/km vs ~$15/km for conventional telco fiber; blended prices increased ~20% in Q2 (MD Mahendra Nahata, Concall p. 15-16).
Operating leverage expanding profitability margins.
Source
Consolidated EBITDA margin expanded by 640 bps YoY to 25.89%, while PAT margin rose 862 bps YoY to 15.51% (Press Release p. 1).

Headwinds

Severe EPC/turnkey operational drag and unbilled milestone expenses.
Source
Turnkey segment booked an EBIT loss of ₹122.58 crore in Q2 FY27 due to expenses incurred on BharatNet where 25-step verification prevented billing (Financial Results Segment Report, p. 6; Concall p. 10-11).
Extreme market cost inflation in preform raw material.
Source
"If you try to buy from market, they are insane prices... They have gone up by 600%... USD300 per kg price cannot continue." (MD Mahendra Nahata, Concall p. 22).
Increase in long-term borrowings.
Source
Non-current borrowings grew from ₹389.88 crore as of March 31, 2026 to ₹651.63 crore as of September 30, 2026 to fund capex (Consolidated Balance Sheet, p. 7).

New businesses and products

capacity expansion · Under planning/construction phase in Madhya Pradesh; interim sourcing planned from Q1 next calendar year.

Preform Manufacturing Facility

Expected benefit: Capacity of 600 MT/annum to support 50% of internal fiber requirements and expand margins via backward integration.
Risks: Machine supply delivery delays and reliance on imported raw materials like germanium.
Timeline: Commissioning by October 2028; interim solution from Q1 CY27.
Investment: ₹1,250 crore

Source

Presentation p. 15, 18; MD Mahendra Nahata, Concall p. 9, 14, 17.

new business · 1,000 acres allotted by Andhra Pradesh government; construction starting soon; participated in tender for 800,000 grenades.

Ammunition Complex & Multi-Mode Hand Grenades (MMHG)

Expected benefit: Revenue diversification into defence ammunitions starting in about 2 years.
Risks: Tender win uncertainty, qualification delays, and defense procurement timelines.
Timeline: Revenue expected in approximately 2 years.
Investment: ₹230 crore (Phase 1)

Source

Presentation p. 15; MD Mahendra Nahata, Concall p. 4, 7.

acquisition · Nearing completion within Q3 FY27.

Aerospace Business Acquisition

Expected benefit: Brings ₹1,600 crore to ₹1,800 crore export order book in aerostructures/aerospace cable assemblies.
Risks: Integration risk and execution of export delivery timelines.
Timeline: Expected to complete in current quarter (Q3 FY27).

Source

MD Mahendra Nahata, Concall p. 4, 7, 10; Presentation p. 16, 19.

capacity expansion · Under implementation.

Optical Fiber & Cable Capacity Expansion

Expected benefit: Optical fiber capacity expanding from 28 mn fkm to 43.1 mn fkm p.a.; cable expanding from 39 mn fkm to 62 mn fkm p.a.
Risks: Execution timelines and end-market demand absorption.
Timeline: Completion by July 2028.
Investment: Part of overall planned ₹1,800 crore capex across OF, OFC, and preform.

Source

Presentation p. 15; MD Mahendra Nahata, Concall p. 4, 9.

Things to check

Revenue up over 60%: check for an acquisition or a weak year-ago quarter
Mounting losses in Turnkey Contracts/EPC business despite overall company profitability.
Source
Segment EBIT loss worsened to ₹122.58 crore in Q2 FY27 from ₹87.53 crore in Q1 FY27, with cumulative H1 FY27 EBIT loss of ₹210.11 crore (Financial Results Segment Report, p. 6).
Extreme preform market price inflation creating major cost vulnerability once fixed contracts expire.
Source
MD stated preform open-market prices rose 600% to $300/kg; HFCL relies on external preform for 100% currently and 50% post-2028 expansion (Concall p. 17, 22).

How the call went

Management was extremely bullish and provided ambitious multi-year guidance across business verticals, but routinely deflected questions seeking exact volume/price splits, specific customer breakdowns, or commercial details on preform sourcing by citing NDA and trade secret protections.

Specific or vague: Management gave detailed operational metrics on capex figures, capacity expansions, and segment targets, but was vague on volume-price split and customer specifics.
Candour: Management was forthright regarding the delays and losses in EPC/BharatNet and raw material price inflation, but secretive about near-term preform sourcing arrangements.
The hard questions: Analysts probed sustainability of ~26% EBITDA margins, volume vs price mix, customer concentration among hyperscalers, preform supply availability, and the EPC drag.

What analysts pressed on

Customer risk and concentration in hyperscaler order book.
Sustainability of high EBITDA margins given competitor margins and impending global capacity increases.
Supply constraints and price spikes in preform and raw materials like germanium.
Timing of turnaround and restructuring of the loss-making EPC turnkey division.

Answers that sidestepped

Refused to give volume vs pricing growth split ('I cannot give you a ballpark number. If I give that, it would be an incorrect statement', Concall p. 20).
Refused to specify the interim preform sourcing solution, citing 'trade secret' (Concall p. 21).
Did not share the exact revenue contributed in H1 by the USD 1.1 billion hyperscaler order (Concall p. 12).

Numbers against the story

The narrative presents an unprecedented boom driven by AI and hyperscaler data centers, which is strongly corroborated by consolidated revenue (+143.6% YoY) and net profit (+448% YoY). However, the narrative emphasizes portfolio-wide strength, whereas numbers reveal sharp divergences: Telecom Products generated ₹716.24 crore EBIT (30.8% margin), while the Turnkey/EPC segment remained deeply in the red with a ₹122.58 crore loss, dragging group profitability.

Sources

Concall transcript · filed 26-Oct-2026
Press release · filed 19-Oct-2026
Investor presentation · filed 19-Oct-2026
Figures: the company’s results filing with NSE, linked under the table.

Notes written by gemini-3.8-flash from the documents above on 1 November 2026. They summarise what the company said and can contain mistakes: check the source passage before relying on a point. Not investment advice.