HFCL Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

HFCL Ltd trades at ₹194, in a confirmed uptrend and 14 weeks into that stage. That is +49.2% against its own 200-day average. It sits at 85% of a 52-week range of ₹61 to ₹217. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (2 weeks and counting).

Today the stock is in a confirmed uptrend — week 14 of stage 2, confirmed. At ₹194 it trades +49.2% versus its 200-day average and sits at 85% of its 52-week range (₹61–₹217).

Against the market, two honest reads. Cumulative: over the last 10.4 years the stock moved +1,041% while the NIFTY 500 moved +282% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (2 weeks and counting; last ahead the week of 2026-07-17) — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

HFCL Ltd trades at 51.8× P/E, at the pricey end of its own range (92nd percentile). Its long-run median P/E is 27.5×, measured across 10.5 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 51.8× is at the pricey end of its own range (92nd percentile), against a long-run median of 27.5× measured over 10.5 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

🚨 Why the multiple sits where it does: over the past year annual EPS moved +65.9% against a +164.7% price move — the price outran earnings, pushing the multiple UP its own range.

The price move, decomposed: over 5y, of the +20.9%/yr price move, ~+9.5%/yr came from earnings growth and ~+11.4 pp from the multiple (expanding); over 10y, of the +27.2%/yr price move, ~+2.4%/yr came from earnings growth and ~+24.8 pp from the multiple (expanding). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is full against its own past, so the story rests on the earnings line underneath it, not the multiple.

A quarterly PEG curve, which only the second data source carries, is not drawn on this page: its two data sources disagree by up to 9.8% on reported income across 14 comparable periods. A figure two sources cannot agree on is not drawn — the gap is a decision, not missing data.

Stage: Turning around Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

HFCL Ltd reads as turning around on its fundamental arc. Turning around — profit growth swung from −90.9% at the trough to +1676.5%, a 3-quarter improving streak, ROCE holding at 11.0%. The read is built from 8 quarters across 4 curves, on partial evidence.

Why it matters: growth inflections are where re-ratings start — the curves say a turn is forming, so the question becomes whether the next quarters confirm it.

Return readings here are annual, not quarterly — read as level and direction only; they can confirm the growth curves but never drive the stage on their own.

A partial read: at least one curve is short, or the returns curve is not the computed quarterly series — hold the stage word a little more loosely.

4-Factor Sector Score

65.1/100 — rank 4 of 18 in Telecom Services · 74% evidence confidence

HFCL Ltd scores 65.1 out of 100 against the 18 companies it is compared with in Telecom Services, ranking 4. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 25.8 + 13.1 + 6.2 + 20 = 65.1. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Revenue Revenue is the top line: everything the company billed its customers in the period.

HFCL Ltd reported ₹1,915 Cr of revenue in the Jun 26 quarter, +119.9% year on year. That is the 3rd straight quarter of year-on-year growth. Over 10 years it has compounded at 5.6% a year. The last full year, FY26, came in at ₹4,949 Cr. The last four reported quarters add to ₹5,993 Cr.

FY26 revenue came in at ₹4,949 Cr (+21.7% on the year), capping 10 years at 5.6% compound. The latest quarter (Jun 26) printed ₹1,915 Cr, +119.9% year on year — the 3rd consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +65.7% growth against the decade's 5.6% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +58.6% over the last 4 quarters against +13.8%/yr over the last 8 — accelerating; TTM profit +1,676.5% vs +27.4%/yr — accelerating.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

HFCL Ltd's operating margin is 22.0% in the Jun 26 quarter, +18.7 percentage points against the same quarter a year ago. That is the widest this company has ever printed on a full-year basis. Across 13 fiscal years the operating margin has ranged 8.0% to 15.0%. The current quarter is running above every full year in that window.

The latest quarter's operating margin is 22.0%, +18.7 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 8.0%–15.0%, and FY26's 15.0% is the top of that band — a record year.

Why the margin moved: operating margin went +18.4 pp year on year while gross margin went +11.7 pp — the gain came mostly from the gross line: input costs and pricing.

Worth repeating from the valuation section: cheap against its own history on record margins is not the same thing as cheap — a record margin flatters every ratio built on top of it.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

HFCL Ltd earned ₹246 Cr of net profit in the Jun 26 quarter. Full-year FY26 profit was ₹329 Cr. The 10-year compound rate is 7.7%. That is 12.8% of the quarter's revenue. The same quarter a year earlier lost ₹29.0 Cr. 2 of the last 12 reported quarters were loss-making.

Jun 26 profit was ₹246 Cr, null year on year. On the full year, FY26 printed ₹329 Cr (+90.2%), and the 10-year compound rate is 7.7%.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years −3% of HFCL Ltd's reported profit arrived as operating cash — a gap worth watching. In FY26 that was ₹−378 Cr of operating cash against ₹329 Cr of profit. After ₹405 Cr of capital spending, ₹−783 Cr was left as free cash. Cash resolution here is annual, because quarterly cash statements are not published.

FY26: operating cash of ₹−378 Cr against reported profit of ₹329 Cr, leaving free cash of ₹−783 Cr after ₹405 Cr of capital spending. Across the last 3 fiscal years the conversion rate is −3% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

🚨 Why conversion sits at −3%: the cash cycle stretched 192 days between FY21 and FY26 — more of each rupee of profit waits inside the cycle before arriving. Less than 70% of profit arriving as cash is the thing to watch on this page.

Router verdict: conversion is below par and the cash cycle has stretched 192 days — the next section's job is to find where the cash is stuck.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

HFCL Ltd's cash conversion cycle runs 210 days in FY26, up from 18 days in FY21. Capital spending ran ₹1,231 Cr over the last 3 years. At FY26 sales of ₹4,949 Cr each day of that cycle holds about ₹13.6 Cr, so roughly ₹2,847 Cr sits inside the business at any moment.

FY26: debtors at 163 days, inventory at 161 days — roughly 5.3 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 210 days, looser than FY21's 18.

The full loop: cash goes out to suppliers and production on day 0; stock waits 161 days to sell; customers pay about 163 days after that; and suppliers themselves are paid at 115 days — netting out to the 210-day cycle.

In money terms: at FY26 sales of ₹4,949 Cr, each day of the cycle holds about ₹13.6 Cr — so the 210-day loop keeps roughly ₹2,847 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹1,231 Cr over the last 3 fiscal years against ₹345 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹85.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the working-capital loop is the cash sink the router flagged — watch the cycle, not the P&L.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

HFCL Ltd earns a ROCE of 11% in FY26. That is up from a trough of 8% in FY25. A return-on-invested-capital spread against the cost of capital is not computable from what is held here. The wiring behind it is 6.6% net margin on 0.56× asset turns.

FY26 ROCE is 11%, recovered from a FY25 trough of 8% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 6.6% net margin × 0.56× asset turns × 1.81× balance-sheet leverage ≈ 6.7% on equity. Margin does its share; leverage is a meaningful part of the equation.

The quarterly return curves and the return-on-invested-capital overlay, which only the second data source carries, are not drawn on this page: its two data sources disagree by up to 9.8% on reported income across 14 comparable periods. A figure two sources cannot agree on is not drawn — the gap is a decision, not missing data.

Debt Debt-to-equity says how much of the business is funded by borrowings; interest cover says how many times operating profit pays the interest bill. Low and high, respectively, is the safe corner.

HFCL Ltd carries ₹1,744 Cr of borrowings against ₹4,891 Cr of equity in FY26, a debt-to-equity of 0.36. Operating profit covers the interest bill 3×. Over 5 years borrowings went from ₹942 Cr to ₹1,744 Cr. Capital spending ran ₹1,231 Cr across the last 3 of those years.

FY26: borrowings of ₹1,744 Cr against equity of ₹4,891 Cr — a debt-to-equity of 0.36. Operating profit covers the interest bill 3×. Over 5 years borrowings went from ₹942 Cr to ₹1,744 Cr while capital spending ran ₹1,231 Cr in just the last 3 — part of the build-out is riding on borrowed money.

The total-debt and debt-to-equity series, which only the second data source carries, are not drawn on this page: its two data sources disagree by up to 9.8% on reported income across 14 comparable periods. A figure two sources cannot agree on is not drawn — the gap is a decision, not missing data.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Promoters cut 9.3 points of HFCL Ltd over 8 quarters, the biggest move on the register. That takes promoters to 28.3% of the company. Foreign institutions moved +8.7 points over the same window, to 15.7%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Promoters: −9.3 points over 8 quarters to 28.3%; Foreign institutions: +8.7 points over 8 quarters to 15.7%; Domestic institutions: +3.5 points over 8 quarters to 10.9%.

🚨 Why the register moved: promoters drove it (−9.3 points), absorbed on the other side by foreign institutions (+8.7 points) — distribution into the market’s bid.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

HFCL Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

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