HFCL shares climbed nearly 5% to touch an intraday high of ₹228 on Wednesday, July 22, following the board's approval of a ₹215 crore investment for a new manufacturing facility for advanced AI Data Centre Connectivity Solutions. The stock closed at ₹217.90 apiece on the National Stock Exchange, slipping marginally by 0.03% but showing strong intraday performance. Over the past five trading sessions, shares have fallen 3%, while they have climbed 4% in a month and skyrocketed 200% in 2026. The stock has zoomed 218% year-on-year and hit a 52-week high of ₹229.50, with a total market capitalisation of ₹11,063.86 crore as of the latest trading session. The stock opened at ₹222.00 compared to its previous close of ₹217.97, moving in a range of ₹214.11 to ₹228.00 during the session.
HFCL delivered its highest-ever quarterly financial performance for Q1FY27, reporting a consolidated net profit of ₹246 crore against a loss of ₹29.3 crore in the corresponding period of the previous year. The company achieved a record revenue of ₹1,915 crore, marking a 120% year-on-year increase from ₹871 crore in Q1FY26. EBITDA surged by more than 30% quarter-on-quarter to ₹414 crore from ₹28.8 crore in the preceding quarter, while the EBITDA margin expanded dramatically to 21.6% from 3.3% on year-on-year basis, representing a significant improvement in operating profitability. The performance was mainly driven by ramping demand for AI data centres as well as an increase in exports, as per the company statement. The company attributed the strong performance to robust demand from hyperscale data centres, improved product realisations, operating leverage and rising global demand for optical connectivity solutions.
The company's Board approved an investment of approximately ₹215 crore to establish a state-of-the-art manufacturing facility for advanced AI Data Centre Connectivity Solutions at a meeting held on 22 July 2026. The facility will have a capacity of 2,70,000 assemblies per annum and is expected to be commissioned by September 2027, aiming to capitalize on the rising demand from hyperscale data centres and cloud infrastructure. The proposed manufacturing facility will manufacture advanced data centre connectivity products, including Miniature Multi-Fiber (MMC) and Super High-Density Multi-Fiber Termination (SNMT) assemblies, which are widely used in high-speed data centre and AI infrastructure. As per the company's regulatory filing, the decision was taken in view of the significant growth in global demand for data centre connectivity products, driven by the rapid deployment of Artificial Intelligence (AI), hyperscale data centres, cloud computing, high-performance computing and high-speed networking infrastructure. The proposed facility is in addition to the existing manufacturing facility of HTL Limited, its subsidiary, and upon commissioning, it will substantially augment the company's manufacturing capacity for data centre connectivity products on a consolidated basis.
HFCL has emerged as a favourite among foreign investors, with FIIs more than doubling their stake to 15.7% in Q1 despite the stock surging 200% in 2026. Foreign institutional investors (FIIs) have pulled out nearly $20 billion in FY26, but the selling has not been broad-based, with their return increasingly value-driven and focused on select opportunities. The sharp increase in foreign ownership comes as India's data centre industry enters a multi-year growth cycle, with India's data centre IT load growing from around 350 MW in 2019 to 1.5-1.6 GW in 2025, translating into a 29% CAGR, significantly outpacing the global growth rate of around 20%. According to international brokerage Nomura, this growth is driven by accelerating digitalisation, rising cloud adoption and growing demand for artificial intelligence (AI) infrastructure. The pace of outflows has eased as India's valuation premium over emerging markets cooled to its historical average of around 50%, though overseas allocations remain highly sensitive to global macroeconomic developments.
Exports emerged as a key growth driver during the quarter, contributing ₹1,063.30 crore, constituting 55.53% of total revenue, representing a significant increase from ₹209.70 crore (24.08%) in Q1FY26. The export revenue grew more than 4 times from the previous year, demonstrating the company's successful diversification strategy. The product segment continued to dominate the revenue mix, accounting for 85% of total revenue, compared with 66% in the corresponding quarter last year. HFCL's highest-ever order book of around ₹26,665 crore provides strong revenue visibility and represents nearly five times its FY26 revenue, with the company reporting this as the highest-ever order book in its history. As per the company's regulatory filing, the proposed investment is expected to strengthen the company's manufacturing capabilities, expand its product portfolio in the high-growth data centre connectivity segment and enhance export opportunities. The company is also transitioning from a commodity optical fibre cable supplier to a high-value AI optical connectivity platform through its newly launched OptiQ AI brand.
Buoyed by the strong start to the financial year, HFCL doubled its FY27 revenue growth aspiration to 40%, significantly higher than its earlier expectations of 20% growth. The company's capacity expansion programme remains on track, with optical fibre capacity set to increase from 28 million fibre kilometres to 34 million fibre kilometres, while optical fibre cable capacity will rise from 34 million fibre kilometres to 43 million fibre kilometres. The company is also progressing with a greenfield preform manufacturing facility as part of its backward integration strategy to strengthen its manufacturing capabilities. As per the company's regulatory filing, the proposed facility is expected to create substantial business opportunities for the Company in both domestic and international markets, as this structural shift is accelerating the demand for next-generation high-density optical connectivity solutions. The company views the defence business as a strategic long-term growth engine, underpinned by sustainable demand, strong policy support and significant opportunities for value creation over the coming years. During the quarter, the company initiated the process of setting up its ammunition manufacturing complex in Andhra Pradesh.
Deven Choksey Research expects defence revenue to rise from ₹77 crore in FY26 to ₹400 crore in FY27, ₹1,200 crore in FY28 and ₹5,000 crore in FY29, with EBITDA margins exceeding 25%. The brokerage noted that defence customers provide advance payments, significantly improving working capital dynamics compared with the legacy EPC business. HFCL has consolidated its defence assets under HFCL Advance Systems (HASPL), bringing together aerostructure manufacturing—including the acquired business with an export order book of over ₹2,000 crore—along with radar and surveillance systems through Raddef, and thermal weapon sights under a single scalable platform. The company is also setting up an ammunition manufacturing facility in Andhra Pradesh to produce electronic fuzes, multi-mode hand grenades, and 155 mm artillery shells. According to Deven Choksey Research, products are expected to account for more than 80% of revenue, up from 62% currently, while exports are projected to exceed 50%, compared with 41% now. The brokerage expects HFCL to transition from a commodity optical fibre cable manufacturer into a diversified, multi-vertical technology platform, with the building blocks for this transformation already in place.
