HFCL Q1 FY27 Results (NSE: HFCL)
Signal: Loss reversed
The read
Q1FY27 consolidated revenue at ₹1,914.98 Cr (+119.8% YoY) and PAT of ₹245.64 Cr (turnaround from -₹29.30 Cr loss) mark a continuation of the momentum from Q4FY26's revenue of ₹1,824.12 Cr, with fourth consecutive quarter of OPM expansion. Leverage from fixed-cost base (employee cost grew only 39.6% YoY, D&A 59.2% YoY, finance cost 12.3% YoY vs revenue 119.8% YoY) drove OPM to 17.5% (vs -0.2% in Q1FY26). Telecom Products segment is the clear engine, and the Board's approval of a ₹215 Cr capex for a new data center connectivity facility (commissioning by Sep'27) signals management confidence in sustaining this growth trajectory.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,914.98 Cr | 119.8% | 5.0% |
| EBIT | ₹394 Cr | 18.8% | |
| Net profit | ₹245.64 Cr | turnaround vs -₹29.30 Cr loss | |
| EPS | ₹1.49 | turnaround vs -₹0.22 loss | |
| EBIT margin | 17.5% |
P&L walk
Revenue surged 119.8% YoY to ₹1,914.98 Cr, driven by a massive 192.4% YoY jump in Telecom Products segment (₹1,589.53 Cr). Gross margin (cost of materials + purchases + change in inventories as % of revenue) contracted slightly due to mix, but fixed-cost leverage (employee costs +13.7% YoY vs revenue +119.8%, depreciation +59.2% YoY vs revenue +119.8%) expanded OPM by +1700bps to 17.5%. Finance cost as % of revenue dropped 160bps YoY to 3.3%, boosting PAT to ₹245.64 Cr, a complete turnaround from a loss of ₹29.30 Cr in Q1FY26. EPS at ₹1.49 vs loss of ₹0.22 YoY.
Segments
Telecom Products is the absolute driver — ₹1,589.53 Cr revenue (+192.4% YoY, +5.4% QoQ), segment PBIT margin jumped to 30.4% (vs 10.3% in Q1FY26), contributing ₹483.92 Cr segment result vs ₹55.76 Cr a year ago. Defence segment (-₹8.04 Cr) and Turnkey (-₹87.53 Cr) remain drags but are small relative to Telecom Products. Consolidated PAT (₹245.64 Cr) is higher than standalone (₹179.21 Cr), showing subsidiaries (notably HTL Ltd contributing ₹84.92 Cr net profit per auditor report) are performing strongly.
Key positives
- Revenue ₹1,914.98 Cr (+119.8% YoY, +5.0% QoQ) — substantial acceleration driven by Telecom Products segment which grew 192.4% YoY to ₹1,589.53 Cr.
- OPM at 17.5%, up 1700bps YoY; fourth consecutive quarter of margin expansion, driven by operating leverage as fixed costs grew far slower than revenue.
- PAT turnaround to ₹245.64 Cr from a loss of ₹29.30 Cr YoY; EPS ₹1.49 vs -₹0.22 YoY.
- Board approved ₹215 Cr capex for new data center connectivity facility (2,70,000 assemblies per annum) targeting commissioning by Sep'27, indicating confidence in sustained demand.
- Debt/Equity at 0.36x (per Fundamentals block), finance cost grew only 12.3% YoY vs 119.8% revenue growth, indicating low financial leverage risk.
Key concerns
- Turnkey Contracts and Services segment remains a drag with -₹87.53 Cr segment PBIT on ₹280.32 Cr revenue — substantial loss-making division that continues to weigh on overall profitability.
- Defence Product & Services segment also loss-making at -₹8.04 Cr PBIT on ₹23.74 Cr revenue, indicating these segments require restructuring or turnaround.
- Equity dilution from QIP and warrants (share count increased 6.1% YoY to 153.03 Cr) partially offsets EPS growth; further dilution possible if remaining warrants are exercised within 18 months.
Research and educational content only. Not investment advice.