HFCL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | HFCL | Market Cap | 17,760 Cr. | Current Price | 116 ₹ | High / Low | 120 ₹ |
| Stock P/E | 70.2 | Book Value | 30.9 ₹ | Dividend Yield | 0.09 % | ROCE | 9.26 % |
| ROE | 5.82 % | Face Value | 1.00 ₹ | DMA 50 | 82.9 ₹ | DMA 200 | 77.7 ₹ |
| Chg in FII Hold | -0.40 % | Chg in DII Hold | -0.50 % | PAT Qtr | 178 Cr. | PAT Prev Qtr | 56.2 Cr. |
| RSI | 84.4 | MACD | 9.72 | Volume | 24,49,87,295 | Avg Vol 1Wk | 9,13,63,795 |
| Low price | 59.8 ₹ | High price | 120 ₹ | PEG Ratio | -305 | Debt to equity | 0.32 |
| 52w Index | 94.2 % | Qtr Profit Var | 345 % | EPS | 1.65 ₹ | Industry PE | 16.9 |
Positive
- Market cap of ₹17,760 Cr. provides mid-cap stability.
- Quarterly PAT surged from ₹56.2 Cr. to ₹178 Cr. (+345%), showing strong short-term earnings momentum.
- EPS of ₹1.65 indicates profitability, albeit modest.
- Debt-to-equity ratio of 0.32 reflects manageable leverage.
- Strong trading volumes (24.5 Cr. shares) highlight high market participation.
Limitation
- Extremely high P/E ratio (70.2) compared to industry average (16.9), suggesting unsustainable valuation.
- Negative PEG ratio (-305) highlights poor growth-adjusted valuation.
- ROE (5.82%) and ROCE (9.26%) are weak compared to peers.
- Dividend yield of 0.09% is negligible.
- Current price (₹116) near 52-week high (₹120), limiting upside potential.
- RSI at 84.4 indicates overbought conditions, raising risk of correction.
Company Negative News
- Decline in FII holdings (-0.40%) and DII holdings (-0.50%) show reduced institutional confidence.
- Overbought technical indicators suggest short-term correction risk.
Company Positive News
- Quarterly profit growth of 345% boosts investor sentiment.
- Strong momentum supported by high trading volumes.
- Stock trading above both 50 DMA (₹82.9) and 200 DMA (₹77.7), confirming bullish trend.
Industry
- Telecom and optical fiber industry is expanding with digital infrastructure demand.
- Industry P/E of 16.9 highlights HFCL’s premium valuation.
- Competitive advantage lies in HFCL’s role in fiber optics and telecom equipment, but profitability remains inconsistent.
Conclusion
HFCL shows strong momentum and short-term earnings growth, but fundamentals remain weak with stretched valuations, low efficiency, and negligible dividend yield.
Entry Zone: Safer accumulation range between ₹105–₹110 on pullbacks.
Long-Term Guidance: Risky for long-term holding due to unsustainable valuations and weak return metrics. Better suited for momentum-driven short-term trades rather than core investment.
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