HFCL’s AI, data centre exposure drives Nuvama’s Buy call; target implies 56% upside
Nuvama has initiated coverage on HFCL with a ‘Buy’ rating and a target price of Rs 380, implying a 56% upside from its reference price of Rs 244. The brokerage expects the company’s shift towards telecom and networking products, along with rising demand from data centres and exports, to drive earnings growth.
Nuvama has given HFCL an 'Investment' rating with a target price of Rs 380, implying a potential 56% increase from its current reference price of Rs 244. The brokerage firm believes the company's shift towards telecom and networking products, coupled with rising demand from data centres and exports, will drive strong growth in earnings.
HFCL has been transitioning away from turnkey contracts to focus more on optical fibre, telecom products, and data centre connectivity. In Q1FY27, products accounted for 83% of revenue, up from 27% in FY21, as reported by Nuvama. The brokerage anticipates revenue, EBITDA, and adjusted profit to grow at compound annual growth rates (CAGRs) of 39%, 68%, and 92%, respectively, between FY26 and FY29.
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