HFCL shares surged 277% in 2026 as domestic brokerage Nuvama Institutional Equities initiated coverage with a buy rating, citing the company’s strategic shift towards telecom and networking products. Nuvama highlighted HFCL’s strong order book, capital expenditure program, and growth prospects in data centres and defence sectors, setting a 12-month target price of ₹380, according to livemint.com.
Nuvama noted HFCL’s transition from turnkey contracts to telecom and networking products, which accounted for 83% of Q1 FY27 revenue compared to 27% in FY21. The brokerage emphasized HFCL’s positioning to benefit from global data centre buildouts, supported by record order wins and robust execution capabilities. Additionally, HFCL’s expansion into defence provides diversification and optionality. The brokerage expects HFCL to deliver a compound annual growth rate (CAGR) of 39% in revenue, 68% in EBITDA, and 92% in profit after tax from FY26 to FY29, per livemint.com.
The report also flagged risks including a slowdown in global data centre capital expenditure and delays in HFCL’s preform capacity completion. HFCL’s stock currently trades at 13.1 times estimated FY28 enterprise value to EBITDA, below the 18 times multiple used to derive the target price. Nuvama noted BharatNet as a key contributor to HFCL’s turnkey business, with large-scale fibre network deployment contracts under the programme, according to livemint.com.
Nuvama’s coverage initiation and target price come ahead of the Reliance Jio IPO, which is expected to influence market sentiment. The brokerage’s detailed analysis underscores HFCL’s evolving business model and growth trajectory, with the next quarterly results expected to provide further clarity on execution and order book development.