HFCL Q1 FY27: 40% Growth Guidance, ₹26,665 Cr Order Book, and a Defence Business Still Waiting on Army Trials

On the Q1 FY27 call, Promoter and Managing Director Mahendra Nahata reported consolidated revenue of ₹1,914.98 Cr against ₹871.02 Cr a year earlier, EBITDA of ₹445.27 Cr (23.25% margin, against 4.93% in Q1 FY26 and 18.47% in Q4 FY26) and profit after tax of ₹245.64 Cr against a loss of ₹29.30 Cr in Q1 FY26. The order book stood at about ₹26,665 Cr, which the company describes as an all-time high and roughly five times FY26 revenue.

Guidance moved. Management said it can "raise our aspirations for FY27 to a revenue growth of 40% and above", from the 20–25% indicated at the start of the year, and that the 20%-plus EBITDA margin aspiration for FY27 had been exceeded in the first quarter. About ₹16,000 Cr of the order book is optical fibre cable. Hyperscaler contracts were described as priced in a range of $18 to $28 per fibre-kilometre depending on fibre type and count.

The defence business is where the call spent most of its time, and where the distinction between disclosed facts and targets matters most. Disclosed: on June 3, the board approved a restructuring that puts HFCL's defence activities under HFCL Advance Systems Pvt Ltd (HASPL), with HFCL at 51.02% and outside investors putting in ₹175 Cr; HASPL acquires HFCL Defence Systems (formerly Spiral EHL Engineering) and the aerostructure business of Defsys Solutions for ₹25 Cr each, takes 80% of Raddef for ₹75 Cr, and receives HFCL's thermal weapon sight business for ₹50 Cr. The filing says the transaction gives "immediate access to an export order book of ~₹1,890 crore" and is "likely to be completed in the calendar year 2026".

Targeted, not yet contracted: management reiterated a roughly ₹500 Cr defence revenue aspiration for FY27, said the export order book stands at about ₹2,200 Cr, and set out ₹3,000 Cr-plus for FY29 and ₹5,000 Cr for FY30 for the defence and aerospace business. Two items are trials, not orders. HFCL has been shortlisted for the BMP-2 modernisation programme and submitted its sample; Mr Nahata said the Army trial "has started from 20th", should take about 1.5 months, and is followed by a winter trial before orders. An integrated border-surveillance system with HFCL's radar, sensors and command-and-control software is to be demonstrated to the Army's Northern Command in September. Neither carries a value or a date beyond the words on the call.

The claim that the market ignored the call is not supported by the tape. HFCL fell from ₹217.90 on July 22 to ₹184.69 on July 30, a 15.2% decline over six sessions on volume above the 20-day average, then recovered through August to ₹228.01 on August 21 and ₹251.47 on August 28, a new high. The stock is 320% above its 52-week low of ₹59.82 and, with RSI at 76.9, in overbought territory on the 14-day measure.

The margin step-up is the substantive change: EBITDA went from ₹42.93 Cr to ₹445.27 Cr in a year on revenue that rather more than doubled. Management attributes it to mix (a larger share of own-manufactured fibre and cable, backward integration into preform) and to execution on the order book. The 40% FY27 aspiration implies revenue of roughly ₹7,300 Cr against FY26's about ₹4,950 Cr (the four FY26 quarters summed); the first quarter's ₹1,915 Cr annualises well above that, which is why analysts on the call asked whether the guidance was conservative. Mr Nahata declined to raise it further.