Domestic brokerage firm, Nuvama Institutional Equities has initiated coverage on HFCL with a 'buy' rating, citing the company's shift towards telecom and networking products, its order book, capital expenditure programme and growth opportunities in data centres and defence, Business Today. Mint couldn't independently verify the report.
According to Nuvama Institutional Equities, HFCL has pivoted decisively from turnkey contracts to telecom and networking products (83% of Q1 FY27 revenue versus 27% in FY21).
It is well poised to ride on data center buildouts globally, backed by record order book, capex program and robust execution capability (reflected in order wins). Moreover, HFCL's defence scale-up creates a valuable diversification along with a significant optionality.
The domestic brokerage expects HFCL to post a compound annual growth rate (CAGR) of 39% in revenue, 68% in EBITDA and 92% in profit after tax (PAT) over FY26–FY29. Nuvama has set the 12-month target price at ₹380, based on 18 times estimated enterprise value to EBITDA for Q3FY29, in line with global peers.
Nuvama flagged a slowdown in global data centre capex and delays in the completion of HFCL's preform capacity as key risks. It added that the stock trades at 13.1 times its estimated FY28 enterprise value (EV) to EBITDA.