HFCL (HFCL) Q2 25/26 earnings summary

Executive summary

• Strategic focus on innovation, capacity expansion, and diversification into telecom, defense, and digital infrastructure, with strong positioning in both domestic and global markets.

• Major investments in optical fiber and cable manufacturing, defense electronics, and export growth, supported by robust order inflows and ESG improvements.

• Defense business gaining momentum with new contracts, indigenous solutions, and a 1,000-acre land parcel for a defense manufacturing complex in Andhra Pradesh.

• Focus on high-growth engines: defense and data centers, with strong demand visibility and better margins.

• Board approved unaudited standalone and consolidated financial results for Q2 and H1 FY2025-26, reviewed by the Audit Committee and auditors, with no material misstatements noted.

Financial highlights

• Q2 FY26 consolidated revenue at ₹1,043.34 crore, up from ₹871.02 crore in Q1 FY26, but down from ₹1,093.61 crore in Q2 FY25.

• EBITDA at ₹203.37 crore, up from ₹140.29 crore in Q1 FY26 and ₹171 crore in Q2 FY25; EBITDA margin at 19.49%.

• PAT at ₹71.92 crore, reversing a Q1 FY26 loss of ₹29.31 crore and nearly matching Q2 FY25's ₹73 crore; PAT margin at 6.89%.

• H1 FY26 revenue: ₹1,914.36 crore, down 14.99% YoY; EBITDA: ₹246.30 crore, down 31.05% YoY; PAT: ₹42.62 crore, down 76.83% YoY.

• Order book at ₹9,981 crore as of September 30, 2025.

Outlook and guidance

• Revenue growth guidance of 20% for FY26 maintained, with expectations of continued strong demand in telecom and defense.

• Defense revenue expected to exceed ₹500 crore in FY27, with potential to reach four figures in subsequent years.

• Passive connectivity solutions revenue targeted at ₹400 crore in FY26, rising to ₹900-1,000 crore in FY27.

• Capacity expansion to 45 million fiber kilometers per annum by next year, with utilization expected above 80%.

• Positioned to capitalize on export rebound and broaden international customer base.