HFCL Q3 FY26 performance boosted by exports, defence orders

HFCL, a technology enterprise with operations in high end Telecom and Defence Equipment, Optical Fiber and Optical Fiber Cables and also creating digital networks for telcos, enterprises and governments, reported steady operational and financial progress in the third quarter of the 2025–26 financial year, supported by higher exports, an improving revenue mix, sustained order inflows, and continued capacity expansion. The company also recorded advances in its defence manufacturing programme, aligned with India’s domestic production priorities.

Financial Performance and Order Book

For the quarter ended December 2025, HFCL posted consolidated revenue of Rs 1,210.79 crore, up 16.05 per cent from Rs 1,043.34 crore in the previous quarter and 19.65 per cent year-on-year. Earnings before interest, depreciation, tax and amortisation (EBIDTA) rose to Rs 243.52 crore, representing a 19.74 per cent sequential increase and a 41.67 per cent rise compared with the same period last year. The EBIDTA margin improved to 20.11 per cent, from 19.49 per cent in the previous quarter and 16.99 per cent a year earlier.

Profit after tax stood at Rs 102.37 crore, an increase of 42.34 per cent quarter-on-quarter and 41.04 per cent year-on-year. The PAT margin improved to 8.45 per cent, compared with 6.89 per cent in the previous quarter and 7.17 per cent in the corresponding period last year.

On a standalone basis, HFCL reported revenue of Rs 1,223.89 crore, EBIDTA of Rs 170.61 crore, profit before tax of Rs 78.94 crore, and profit after tax of Rs 56.19 crore during the quarter.

The company’s order book remained strong, standing at Rs 11,125 crore as of 31 December 2025, compared with Rs 9,981 crore in the preceding quarter and Rs 10,410 crore a year earlier. The growth reflects continued order inflows across products, exports, engineering, procurement and construction, and defence segments, providing improved revenue visibility.

HFCL also reported a shift in its revenue composition. Product-related revenues accounted for 60 per cent of total income, up from 51 per cent in the previous quarter, while project revenues contributed 40 per cent. Exports formed 27 per cent of total revenues, nearly doubling from 14 per cent in the same quarter last year, indicating expanding international operations.

Exports, Capacity Expansion, and Defence Operations

Export performance was supported by new orders worth approximately USD 192 million for optical fibre cables. The company attributed this to a recovery in global demand following inventory normalisation, alongside increased investments by hyperscalers, telecom operators, and enterprises in data centres, cloud infrastructure, and artificial intelligence-related workloads.

Capacity expansion continued during the quarter. Optical fibre production capacity reached around 28 million fibre-kilometres, up from 14 million previously, with a target of 33.9 million by December 2026. Optical fibre cable capacity rose to 30.5 million fibre-kilometres, with plans to expand to 42.3 million by June 2026.

During the period, HFCL developed a 3,456-fibre micro duct IBR cable, representing the highest fibre-count product produced by the company to date. It is also working on 6,912-fibre variants, which require specialised manufacturing capabilities and technical precision. The company expects demand for such high-capacity cables to remain stable over the coming years.

In the defence segment, HFCL reported progress in line with India’s indigenisation programme. During the quarter, it received multiple contracts for radar systems, electronic fuzes, and electro-optic equipment, including thermal weapon sights. The company also entered the unmanned aerial vehicle night-vision camera segment with an indigenised thermal camera and secured an order from a domestic UAV manufacturer.

Its drone detection radar systems advanced through static validation trials, while electronic fuzes developed by the company underwent firing tests in January 2026, with further evaluations planned in the coming months. Management expects the defence business to contribute more significantly to operating performance as production volumes increase.

Commenting on the results, Mahendra Nahata, Managing Director of HFCL, said the company focused on execution during the quarter, while expanding exports, building capacity, and strengthening its defence portfolio. He added that the company remains confident about sustaining growth and improving profitability, supported by its order book and evolving industry conditions.