Thank you, Michelle. Good afternoon, everyone.

Before we begin, I would like to read the disclaimer. The statement made during this call may be forward-looking and in nature based on management's current beliefs and expectations.

They must be viewed in relation to the risks that HFCL's business faces that could cause its future results, performance, or achievement to differ significantly from what is expressed or implied by such forward-looking statement. Investors are therefore requested to check the information independently before making any investment or other decisions.

From the management side, which we have with us Mr. Mahendra Nahata, Promoter and Managing Director; Mr.

V.R. Jain, CFO; Mr.

Manoj Baid, Company Secretary; and Mr. Amit Agarwal, Head HR.

Without taking any much time, I'll hand over to Mr. Mahendra Nahata for his opening remarks.

Over to you, sir.

Thank you, Vikash. Good evening, everyone.

I extend a warm welcome to all of you on HFCL's earnings call for the third quarter and nine months ended December 2025. I trust you have had the opportunity to review our financial results, press release, and investor presentation, which are available on our website and the stock exchanges.

The quarter was characterized by a combination of near-term volatility and strong long-term structural opportunities. Globally, evolving tariff structures, trade realignments, and supply chain recalibration led to certain logistical and execution challenges during the early part of the quarter.

However, these conditions stabilized from mid-December onwards, enabling smoother dispatches and supply flows. At the same time, the fundamental demand drivers for optical fiber cables have strengthened immensely.

Rising data consumption, hyperscaler-led data center expansion, AI-driven network upgrades, and growing need for secure high-capacity connectivity are driving a sustained global upcycle in optical fiber cable demand. In India, continued focus on fiberization, digital public infrastructure, and defense indigenization provides long-term visibility across HFCL's core business segments.

The optical fiber cable market has witnessed sharp increase in demand on the account of massive increase in hyperscale data center creation worldwide. Moreover, after a period of inventory correction and deferred capital expenditures, the global optical fiber cable industry has also witnessed a clear restoration in demand over the last few quarters from telecom operators.

Importantly, this recovery is structurally different from earlier cycles. Demand is increasingly skewed towards high-fiber-count, high-performance cables, as required by hyperscale data centers.

Supply of such cables remain constrained due to higher technology complexity, manufacturing precision, and scale requirements. As a result, the improving demand environment has translated into better OFC pricing and realizations, with customers placing greater emphasis on quality, consistency, and delivery reliability.

Modern hyperscale and AI-focused data centers require extremely high fiber density, ultra-low-latency interconnections, and scalable designs to support east-west traffic, storage clustering, and high-performance computing workloads. The Union Budget of 2026 has further reinforced the policy focus on strengthening India's digital and data infrastructure ecosystem.

Measures such as the extended tax holiday for foreign cloud service providers who set up data centers in India underscore the government's intent to position India as a long-term hub for cloud, data centers, and AI-led infrastructure. Massive growth of hyperscale data centers has resulted in a meaningful ramp-up in hyperscaler-led orders, multilayer demand visibility, and sustained capacity expansion plans across the optical communication ecosystem.

HFCL has been preparing for this phase through sustained investments in optical fiber and optical fiber cable manufacturing, combined with focused innovation. As a result, we are today amongst a limited set of global players capable of delivering very high fiber count and low-latency solution at a scale.

During the quarter, we successfully developed 3,456 fiber count microduct IBR cable. Building on this capability, we are now in the process of developing 6,912 fiber microduct IBR cables.

Very few manufacturers globally possess the technology depth and manufacturing discipline required for such products, further strengthening HFCL's competitive positioning. These products are well-suited for dense, space-constrained data center environments and has already seen encouraging customer interaction and traction.

Based on current engagements and pipeline visibility, we are seeing continued demand momentum into the coming quarters, and we expect this trend to keep the same momentum for the next few years as data center and AI-led infrastructure deployments accelerate. In parallel, HFCL has moved beyond cables to data center interconnect solutions.

We have initiated our pre-connected solutions business for data center applications, enabling faster deployment, higher reliability, and reduced installation complexity for customers. We expect the PCS business to contribute ₹400 to ₹500 crore of additional revenues over 2026-2027.

Further, we have commenced production of MPO cables, which are increasingly essential in high-density data center and AI environments. This is a fast-growing segment, and we are expanding capacities and capabilities to scale this business meaningfully.

Over the coming years, we expect MPO and related interconnect solution to generate ₹400 to ₹500 crore of revenue, strengthening HFCL's presence across the full data center connectivity value chain. Taken together, these capabilities position HFCL not merely as an optical fiber cable supplier, but as a comprehensive solutions provider for next-generation data center and AI infrastructure, with visible demand momentum in the near term and strong growth runway ahead.

Another important structural development shaping the outlook is the progress of the India-United States and India-European trade realignment. United States and Europe remain largest and most advanced markets for optical fiber cable, digital infrastructure, secure communication networks, supported by sustained investments in fiberizations and data centers.

A more enabling trade framework has potential to improve market access, strengthen supply chain integration, and enhance the competitiveness of Indian manufacturers with scale and technology depth. HFCL already has a growing presence in United States and Europe, and our recent export wins reflect increasing acceptance of our high-quality, high-fiber-count solutions.

Our fiber and cable capacity expansion programs continue to progress steadily. Optical fiber capacity will rise from 30.5 million fiber kilometers to 42.36 million fiber kilometers by June 2026.

Optical fiber capacity has already been doubled from 14 million fiber kilometers to 28 million fiber kilometers, with the balance 6 million fiber kilometers to be added progressively by December 2026. These expansions enhance our ability to support rising global and domestic demand while improving operational efficiency, automation, and cost competitiveness.

With capacity expansion nearing completion and global demand condition continuing to strengthen, we expect the optical fiber cable segment to contribute meaningfully higher revenues from quarter four of financial year 2026 onwards. The combination of scale, product depth, and improving industry pricing dynamics gives us confidence that optical fiber cable will remain a key growth and value driver for the group.

Exports remained a key highlight during the quarter and continued to be a structural growth engine for HFCL. During quarter three of FY26, we secured export orders aggregating approximately US $192 million, largely driven by optical fiber cable demand from international customers.

Exports continue to gain share within the overall revenue mix. During quarter three of FY26, export revenues accounted for approximately 27% of total revenues, compared to 14% in quarter three of FY25, reflecting a significant structural shift in the business.

Domestic revenues accounted for the balance 73%. This sharp increase in export contribution highlights HFCL's growing global footprint, improved acceptance among international customers, and successful execution of its export-led growth strategy.

Development of new generation of Wi-Fi and UBR telecom equipment continue to be our focus. We are also in process of completion of delivery of 8 lakh units of 5G fixed wireless access customer premises equipment.

We are also in continuous process of developing more advanced versions of customer premises equipment of 5G to be sold not only India, but worldwide. Production and supply of IP-MPLS routers has also started in bulk across the country from quarter three.

These routers are being supplied all over India for the government's BharatNet program. We are in constant process of developing even the high-capacity routers beyond the routers which have already been developed now.

EPC project execution revenues remained relatively subdued during the quarter. However, it is important to highlight that while revenue recognition was slower, on-ground execution planning and preparatory activities remained steady and disciplined, which are expected to translate into a meaningful revenue uptake in the coming periods.

HFCL continues to progress its defense business in line with long-term strategy and India's indigenization priorities. During the quarter, electronic fuses developed by the company underwent firing trials in January 2026, with further tests expected in coming months.

HFCL secured defense orders across radars, electronic fuses, and electro-optic systems, including thermal weapon sights, reflecting growing acceptance of our indigenous capabilities. We also entered the UAV segment with indigenously developed thermal cameras for surveillance applications, supported by a domestic contract from a leading UAV manufacturer.

Development work is in progress well across drone detection radar systems and foliage penetration radar, both of which are in advanced stage of validation. In addition, HFCL is actively working on specialized drone platforms through technology transfer initiatives, which is at an advanced stage of discussion.

Looking ahead, the radar segment is expected to emerge as an important contributor over the coming years, supported by a growing pipeline and upcoming demand opportunities, including the expected RFP under the BMP program, wherein HFCL is one of the five shortlisted parties countrywide. Our order book as on 31st December 2025 stands at ₹11,125 crore, compared to ₹9,981 crore in quarter two of FY26 and ₹10,410 crore in quarter three of FY25, reflecting sustained order inflows and improved visibility.

The mix of our revenue continued to improve. Product revenues constituted 60% of total revenues, while project revenues accounted for 40%, compared to 51% and 49% respectively in quarter two of FY26.

Exports contributed 27% of the revenues during the quarter, up sharply from 14% in quarter three of FY25, highlighting the growing global relevance of our product portfolio. During the quarter, we successfully completed an issue of ₹550 crore through qualified institutional placement.

This capital raise will support capacity expansion, R&D investments, debt reduction, and funding our long-term working capital requirements, ensuring we remain well-positioned for sustainable growth. During the quarter, HFCL received ESG ratings from multiple independent agencies, all reaffirming the strength of our sustainability practices.

We also published HFCL's first sustainability report for FY24-25, providing transparent disclosures of our environmental, social, and governance performance. For us, sustainability is central to every aspect of how we operate and build long-term value.

It shapes our choices on resource efficiency, guides how we engage with communities and partners, and anchors the trust we build across markets. Our ESG efforts are therefore integral to strengthening HFCL's competitiveness, resilience, and reputation as we grow.

Friends, coming to our consolidated financial performance for the quarter: Revenue for quarter three FY26 stood at ₹1,210.79 crore, compared to ₹1,043.34 crore in quarter two of FY26 and ₹1,011.95 crore in quarter three of FY25. EBITDA stood at ₹243.52 crore, compared to ₹203.36 crore in quarter two of FY26 and ₹171.89 crore in quarter three of FY25, with an EBITDA margin of 20.11%.

Profit after tax stood at ₹102.37 crore, compared to ₹71.92 crore in Q2 of FY26 and ₹72.58 crore in Q3 of FY25, with a PAT margin of 8.45%. Revenue of nine months FY26 stood at ₹3,125.15 crore, compared to ₹3,263.8 crore in nine months of FY25.

EBITDA stood at ₹489.82 crore in nine months of FY26, compared to ₹529.08 crore in nine months of FY25, with an EBITDA margin of 15.67%. Profit after tax stood at ₹144.99 crore in nine months of FY26, compared to ₹256 crore in nine months of FY25, with a PAT margin of 4.64%.

As we move forward, our priorities remain firmly focused on enhancing our revenue mix, expanding margins, disciplined execution, technology-led differentiation, prudent capital allocation, and the continued expansion of our global footprint. Building on the strong momentum achieved, we remain confident of sustaining this performance in the coming quarters.

With these foundations in place, we believe HFCL is well-positioned to deliver consistent and sustainable value for our stakeholders. I would like to thank our employees for their dedication, our customers and partners for their trust, and our shareholders for their continued support.

Thank you. We will now open the floor for questions.

Am I audible, sir?

Yeah. Yeah.

Sir, firstly, congratulations on good set of numbers. I just needed a help with Q3 as well as nine-month FY26 data of OFC as a percentage of total revenue.

If possible, can you provide me with the similar numbers from the last financial years, and along with the margins?

OFC as a percentage of total revenue,

I will take

a minute because I've got products at ₹722 crore, and of the product revenue, it is 80%, and the product revenue is 60% of the total revenue, it would say the 48% of the total revenue has been OFC.

Is this for Q3 or nine-month FY26?

This is nine months. Just what I told is the nine months.

Okay. Sir, and what is the current margins on OFC that we have right now?

Current margin on OFC would depend on different kind of cables what we manufacture: high-quantity, high-capacity cable, low-capacity cable. Roughly you can say 10% to 12% net margin.

Sir, can you repeat again? I just lost you on the line.

Roughly it would be about 10% to 12% of margin as PBT, depending on what kind of cable we are manufacturing.

Understood. Sir, again on this front, on the OFC, what is the current realization in this quarter that we had?

Because I think last quarter it was ₹965 per So, what is the current realization?

Current realization would be roughly about ₹1,055 per fiber kilometer, as against ₹964, which was there in the previous quarter. It has gone up by roughly ₹100, you can say.

Right. It's almost a 10%, 15% of increase since the last quarter.

Do we see it going to keep on increasing further or what cycle are we at in terms of realization?

I expect it to increase further by at least another 10% or so, looking at the demand from data centers. I expect it to increase at least 10% or even more.

Right. Just one last question.

In terms of the OFC, what is our share in domestic versus international markets?

Look, international market, I cannot say because the data I don't have available. The domestic market, we should be, this again a very unsubstantiated figure because these are never published by any authentic agency, but my estimation, we should be nearing roughly about 50%, roughly about 45%, 50%.

Very roughly. This is my top of the head calculation, but I shouldn't be much wrong.

This would be your share, right?

Our and my share. I'm talking of my share.

Right, right. Sir.

Thank you. I'll get back on the queue.

Yeah.

Good evening, sir. Congratulations for good set of numbers.

My first question, sir, regarding these are being developed electronic fuses. I think we got initial approval also.

When we can expect final approval? What is the total addressable market in India and a global level?

Which are the players got approval in India? How much average prices per fuse?

Balasubramanian (Arihant Capital):

You are asking too many questions in one line. I won't even remember, I will really reply one by one.

As far as approval in India is concerned, there are only two companies who are manufacturing electronic fuses from long time under transfer of technology from foreign companies. They are not their own developed fuses, which is Bharat Electronics and ECIL Telecom, both government companies.

They have a transfer of technology agreements, one from [unclear] of Israel, another from I forgot the name of the company of South Africa. We are the one who have designed the fuses indigenously.

Test firing took place on 20th January in Balasore this year. There have been some successes, and some cases some improvement is required in the fuses.

We are doing those improvements which have been required by DRDO while testing. Those improvements are being carried out, and retesting of those fuses will be done in April.

I'm quite sure in this April testing, they will be completely approved. That is as far as the Indian manufacturers and approval are concerned.

There is no indigenous design and manufacturer who have got any approval. I am sure, I think, we may be the first one to do that.

One must realize, fuses are very, very critical components, which makes the ammunition blast. Particularly, the proximity fuse has got a small radar in it, which measures the distance between the bomb and the ground at a speed which is faster than the speed of sound.

You can imagine that what kind of criticality it has got. It needs some more improvement, which we are doing.

I am happy that from this testing, we have learned few things which are getting implemented in the new set of design, and April testing should be final and the approval one. It looks to me like that.

Now, in terms of demand, I don't have number for the worldwide demand, but right now, India itself, I think, requires about 0.5 million fuses every year, India itself. Globally, if you see, the demand would be much, much higher in multiples because of the wars going around.

This demand is directly proportional to geopolitical situation. Right now with the Russia-Ukraine war and ammunition of all European countries, United States getting, or many other countries going to Russia or Ukraine getting consumed, these countries need to really build up their stockpile again and supply more to the warring countries, whether it is Russia, whether Ukraine, or any other place.

Demand is substantial. Proximity fuse demand is substantial for 155 gun, that is the highest demand, is a substantial demand.

I don't have the exact number, but demand would be multiple times more than what is required in India.

Sir. Sir, follow-up with electronic fuses only.

What is the current average prices per fuse on the industry level? Mahendra Nahata (Managing Director): It

depends on which fuse, which caliber you are talking. There are different fuses, different calibers.

Just for one example, our proximity fuse of 155 gun would currently in today's market should be at least ₹25,000 to ₹30,000 per fuse.

Sir. What kind of capacities we are planning to build, sir, for electronic fuses side?

When our fuses are completely approved, we would be looking at about 1 lakh fuses per annum.

Sir. Sir, actually, we have guided 20% kind of revenue growth.

We ended up nearly 20% kind of growth in Q3. I think we have to do to achieve those growth by doing nearly ₹1,600 crore plus kind of revenue.

Is there any deferment in export order? Is there any delay in shipments in Q3 because of tariffs?

Currently also, US and India, the trade deal have been improved from 50% to 18%. I just want to understand how we can able to take advantage of this.

Secondly, yeah.

Look, this tariff decrease has been announced last night only. Doing some guesswork, some clarity is still to be achieved in terms of whether it is immediate or whether there will be some gradual, but assuming it is immediate, of course it opens up the environment for everybody and improves the situation for all in-country manufacturers.

Particularly for telecom equipment, the tariff was 50%. When it comes down to 18%, it's a substantial advantage to all telecom equipment manufacturers.

Now, in terms of revenue, of course, revenue shortfall was there in the Q3, particularly on the export segment, because of tariff issue. Lot of shipments which were made by us to United States, which are the major part of export, all those shipments were stuck at airports, or the seaports for the want of clearance because of the tariff issue, because it was getting very extremely difficult at US customs to determine the tariff, whether the tariff of India applies, or tariff of China applies, because some of the component or part into that equipment or cable has come from China.

This was really a big, big problem. For 2 months' time, it remained a big problem for everybody, not only for HFCL, for everybody and many of the countries where this difference of tariff was coming.

Whether a shipment has rushed in the 25% regime or 50% regime, all this kind of situations was there. 1.5 month, we all suffered.

Unfortunately, we had to pay a lot of demurages also at the ports or the airports because not to our fault that shipments were not getting cleared, but because of ambiguity in the tariff structure, it was creating trouble, and we had to pay a lot of demurages also. Anyway, that was out of our control.

That problem, as I said in the beginning, has eased out from mid-December, and now the situation has become absolutely regular, and there should not be any impact going forward. Going forward, I think our revenue in this current quarter would also show some growth.

Percentage I cannot say very clearly at this point of time, but yes, it can be somewhere around 10% to 15% or a little bit more. More important is the profitability.

You would see the profitability percentage probably on an overall basis has increased by year-to-year basis, if you see, there's an increase of 41% in the profitability. Revenue still remaining around the same, but the profitability has increased by 41%, 42%, which is a significant growth.

That growth has come because of our efforts to reduce cost, at the same point of time, innovation, new kind of products, and because of being able to design and manufacture those products which are not so easy to design and manufacture. Very high count fiber optic cable, not so easy to design and manufacture, which we have been able to do.

As a result of this, there has been a better profitability. Key issue which I would like to say, yes, there is some shortfall in revenue than what we expected in terms of growth, but there is a considerable increase in the profitability.

Q1 of the current financial year was a loss, but now we have come into profit. As I can see looking forward, just as a perception of the management from current performance, when we come to the year-end, our profit would be much better than what we did last year.

It would be much better. Even if we maintain the momentum which has been there in Q3, our profit will surpass the profit of last financial year significantly.

Sir. Sir, you clearly mentioned

Thank you, sir.

Congratulations for good set of numbers. Mahendra ji, just would like to understand because there are multiple media articles, and we are hearing from the industry sources that there is a severe shortage of raw material, which is your germanium and preform.

Since we don't have those capacities with us, how the prices of these have moved, and what sort of supply arrangements that we are having for this preform and the other raw materials? If you could just guide us will be really helpful, sir.

Very good question. We don't manufacture preform.

Germanium and all these are required for manufacture preform. Preform we import mostly from Japan, more than 90% we import from Japan.

Whatever quantity we have contracted with Japanese manufacturers are being supplied regularly to us. We don't face any shortage.

No shortage is being faced by us at all. They are supplying to us as they have contracted.

Our capacity requirement for our fiber draw, for which the preform are required, is being fulfilled by Japanese manufacturers. Yes, we are also now taking steps to move ahead in manufacturing preform.

This is another step company is working on, and we should be able to finalize our plans in very near future. Because with this kind of a huge capacity requirement, where we require preform in a such a large quantity because huge capacity of fiber and cable both, we need to have some security for some part of raw material also.

We are working on that plan. Right now, we don't need germanium and all those things.

Our requirement of preform is filled up by our suppliers adequately.

How the prices have moved, sir, in that preform?

Look, prices will move up. Our contracts which were there are in process at this moment of time, those prices whatever we agreed few months ago.

As far as my opinion is that prices would move up significantly by at least 20%, at least 20% to 25%, with the result, I'm seeing an increase in the cable price of 10% and it will move up by another 10% or so in near future. Similar is the fiber price, and similar would be the preform price.

It would move up by some 20%, 25%.

Okay. My second question is on the new-age cables which are required in hyperscalers and in your rollout of data centers, which is either hollow-core or multi-core.

How are we placed in that technology, and how do we see the demand that we capture either in India or in US or European market? In terms of that edge?

It's a

very early stage of this kind of fibers. Multi-core fiber, I don't foresee much of the demand happening, because multi-core does not reduce the transport cost.

It only reduces the space required for fiber. Already there are technologies available where we are packing up to 13,000 fibers into one single cable of a small dia.

Multi-core fiber, I don't see so much of a high demand in future. Hollow-core fiber, yes, it may catch up.

It is in very, very early stage of development. We have also tied up with two large institutions of R&D to develop hollow-core fiber ourselves.

We are already in process of development of hollow-core fiber. There is a dedicated team which we have put in the place in the company with certain R&D institutions to develop hollow-core fiber, which we believe would catch up some attention of the hyperscalers.

Like Microsoft have bought this Lumenisity and all that, but it's still couple of years away. We are already taking steps to develop hollow-core fiber.

Got it, sir. Thank you, and all the very best, sir.

We'll join in the queue.

Thank you for the opportunity. To start with, book-keeping question.

Sir, you mentioned previously on the call that we will be growing 10% to 15% on revenue. Is my understanding correct that this revenue growth will be sequential?

Secondly, we have seen big uptick in the depreciation expense. What are the levels or the run rate going forward we will see?

Or this is the run rate we should follow for the next couple of years from now?

Now, your second question on depreciation, the new fiber optic fiber plant has come into operation. That's why the depreciation has seen some increase.

What was your first question?

My first question: you mentioned on the call that we will see 10% to 15% growth. I understand this growth will be sequential growth and not

a

year-on-year growth?

It would be sequential growth, of course.

Okay. Next question from my side will be: are we on track to expand our capacities as far as IBR cables are concerned?

Because we have not seen any rise in capacity from past quarter. Had the expansion stopped for one quarter, there was some minor disruption or something like that?

No, no, no. We are fully on track to develop IBR capacity, because that is the only way you can pack these 3,600 or 6,900 fibers in one cable.

That is the only way. We have significantly expanded our IBR capacity, and it is continue to be getting extended.

It will keep on happening till May, June, for which machinery orders are already in place and machineries are arriving one by one. Because the machines are not available all together.

There are very few manufacturers of those machines, quality machines. Non-quality you can buy as many, which we don't want.

They're coming one by one. That capacity is under continuous enhancement.

Would be completed by May, June of this financial year. The current expected capacity.

If we find more demand coming up, which I am certain that it would come up, but fiber availability may become a constraint, but cable demand would be there. If we are able to solve the fiber issue, we would be expanding the capacity further.

Okay. One last question I'll squeeze in.

Can you give me a split between 5G products and OFC for this quarter, quarter three?

It is about 80-20.

Sir. It is 80-20 of the 722 which we have provided.

Absolutely.

Yeah. Thank you.

I will join back the queue.

Good evening, sir. Sir, thanks for giving fantastic understanding about the market, demand, and growth trajectory of the HFCL.

Sir, my question was regarding our plan expenditure, what we need to do on 329 acres we have got at Andhra Pradesh. Which are the products are we going to develop over there, and how that commercialization of that project will start?

Mr. Shah, thanks a lot for your good question.

This 329 acres would be eventually 1,000 acres. Balance 600 some 73 acres or so is still to be allocated by Andhra government, which they are going to allot contiguous to our land, which is under their acquisition process and all that.

That is number one. Total it would be 1,000 acres.

The plan to do is to manufacture ammunition there. Ammunition needs a large space to manufacture because there should not be any habitation near about places, because if any unfortunate accident takes place, human life should not come in danger in any unforeseen circumstance.

You need a large open space, by law, to manufacture ammunition. For example, we already have taken technology for multimode hand grenade from DRDO, which has been successfully manufactured and tried by technology-provider DRDO, and now it is under the approval of QA wing of DGQA, what we call, from army because of time frame and you can preserve this and all those kind of things, which is happening right now.

In next 3 months' time, we should be able to offer it to army for their requirement, for which demand is immense. Lakhs of the grenades are required every year just for practice.

Every infantry soldier, all the other soldiers have to throw three grenades as a practice every year. You can imagine kind of a lakhs of the requirement which is there.

This is just one. We are also exploring the possibility of manufacturing more ammunition also.

More ammunition means ammunition fuse we are already in the process of development and final phase of development after the current field trial and the next field trial. We also wish to develop the shells for 155 gun, which we have fuse already we are developing.

We are also working on some of the ammunition for precision-guided ammunition. One is the dumb ammunition which you fire and it goes and falls depending upon your aim and all that, but then there are some precision-guided ammunition, which is fired and it goes with some sort of a GPS or other kind of a technology gets down to that precise area where it is intended to.

We are in discussion with some companies for doing that also. This land is predominantly for the ammunition purposes, that's why this is a large land required as per law.

What will be the capex required for that, and how we are going to raise Too

early to say that, Mr. Shah, too early to say that at this point of time.

Okay. Now sir, we have grown and we have done lot of capex in last few years, and we have increased all the capacity in all the fronts.

We have and now we are here to encash the advantage of that capex and make our company more profitable, utilizing all the capex. Now we need further capex of growth because we are going for this new project, plus we are going for expansion of our optic fiber capacity and all.

Plus the business where we require working capital, inventories, and all. How you plan to raise money?

Do promoter intend to increase their stake from here at the current enterprise value, which is the lowest what we feel in the industry?

Look, first of all, increasing the capacity for optical fiber cable will not matter much, will not require much of the money. Of course, when we go for creation of any large-scale defense manufacturing capacity and all that, yes, that would require.

Promoters have willingness to increase their stake. We have the willingness, but all depends upon shareholders' approval, regulatory clearances.

It is all subject to that. Willingness is, of course, there.

Right.

That shows great confidence, sir. Thank you very much, and best of luck for you.

Hello. Namaste, Nahata

ji.

Namaste. Nahata ji, my question was on the services side.

This time we have seen a loss of about 11 crores on the services side. Why has that been the case, and how do you see that going forward?

Now, these are O&M revenues, and going forward, O&M revenues is going to increase significantly. Army's O&M phase is to start for the NFS which we created, I think next couple of months or maybe by April maximum.

That would be about ₹170 crore per year, ₹170 crore. Then the O&M phase for other equipment we have supplied, which OTN or a couple of other equipment, UBR and which we have supplied to BSNL, that O&M phase is to start.

Some of the private operators we have supplied equipment, that O&M phase is to start. O&M revenue is going to grow significantly.

In my opinion, after 3 years, our O&M revenue would be something around ₹450 to ₹500 crore per year. Hello?

Are you able to hear?

Yeah.

Can you hear me now? Sir, my question was also on the profitability side.

This time we seem to have recorded some loss over there, how are we expecting that to change over the future?

As it is when you are in the warranty period and all that, there is expenditure, but there is no revenue. Revenue starts after the warranty period is over.

In that kind of a period, you incur loss. When you are entering into O&M phase of the AMC, the revenue starts coming up.

Like as I said, in the army project, we expect the revenue starts coming up from April when the AMC contract will take shape and start. Then the revenue starts coming.

Right now, we are spending money, but it's not going to continue for more than few months now.

Right. Got it.

Sir, one question on the 5G equipment side. How is the traction over there on the FW and UBR products that we have?

Look, UBR is good for 5G, 6G, 4G, everything. That is, of course, we are now moving into Wi-Fi and UBR all spoke together.

We are going to move into next generation, from Wi-Fi 6 to Wi-Fi 7. That's the plan we have, and we should start the development pretty soon.

As far as the FWA CPE is concerned, the in-country demand of FWA CPE seems to be reducing because people are using alternate technologies based on unlicensed band, point-to-multipoint unlicensed band, which we don't do. Of course, we are doing point-to-point only.

However, routers, which are again required in 4G and 5G network both, that there we have got a significant traction, particularly in BharatNet. Because router is required in all kind of networks, whether 4G, 5G, wireline, wireless, every kind of network.

There we have seen a significant traction. We have already got orders for about 100,000 routers, which would amount to be about 7 or ₹800 crore.

We are in process of getting more orders. Right now, we are not taking too many orders for routers because there we have a constraint of supply because of component availability and all that, we don't want to trouble the customers.

We first want to deliver some good quantity, then take more orders. Routers have got good traction.

They have already been installed in the field. Connections are already being given to customers by the people who have bought the routers from us, which are the private parties.

That has got a good traction. For CPE, we would now start working on trying to sell it in a international market, would we UBR and Wi-Fi systems.

Sir, quick follow-up on the UBR. We were developing point-to-multipoint, right?

Just a minor follow-up, ma'am. Sorry.

It's a minor follow-up. We were developing the point-to-multipoint, right, sir?

Where are we in the process of that?

Point-to-multipoint, we have not yet started developing. We have not yet started.

We are just looking at worldwide how much is the demand. In India, there is a significant amount of demand from one operator, but other operators are not using it.

Worldwide, unless we see multi-country demand, we would really hesitate to do that, just because demand of one customer and in one country, we don't want to take an expensive development like that. On the contrary, point-to-point demand is good and the development expense is also less, and it's a less risky.

Unless we are 100% satisfied about multipoint demand worldwide, we would not really go into that. It's a spectrum issue.

If you look at the large developed country, United States, all that, operators have a much larger amount of spectrum, they don't need unlicensed band radio. They are very happy within the licensed band, and they can give large capacity to large number of customers using the licensed band.

That is the difference.

Hi, sir. Congratulations on a good set of numbers in 3Q FY26.

Sir, I wanted to know from an AI and a data center perspective, what are the kind of opportunities we are seeing for our products and services portfolio? What is our current position versus our closest peers?

Also, what kind of benefits do we foresee from the recent favorable budget announcements? Can you just put some color so that it becomes clear for us?

I would not put color. I will put the plain color as it is.

Okay.

Basically, data center and hyperscaler demand is really propelling the fiber optic cable and associated industry, as far as HFCL is concerned, to a very next level. Because if you look at the telecom operators, the cable required maximum 288 fiber.

We never supplied more fiber count than that to any telecom operator. Now, data centers don't even look at 288.

They are talking of 3,900 fiber cable, 6,800 fiber cable, that kind of a capacity. Per kilometer cost is multiple high.

Revenue also would go up. Since those kind of cables are manufactured by very few people, because not everybody has the ability to design, develop, and manufacture those kind of cables, which is very good for HFCL, because we are one of the company who have designed, developed, have got machines to be able to manufacture those kind of cables, which has really lifted our optical fiber cable business to next level.

It has provided a very, very large opportunity for companies who have got this technological and manufacturing capacity. Moreover, we did the expansion in right time.

We could foresee this demand coming up. We did our expansion.

As a result of that, not only expansion, but design also. As a result of that, today we are able to supply to these customers who are using this kind of cables all across the world.

We are not supplied in India. Everything what we produce of this kind of cable is getting exported.

There is so much of demand we have. In fact, now we have to refuse orders because we don't have capacity to manufacture that kind of a requirement or demand which is coming up.

Now, second opportunity which this market has given is passive connectivity solution, like MPO cables, like other passive connectivity solutions, which as I said in the beginning, is going to get us at least ₹500 crore of revenue in the next financial year, at least ₹500 crore. Our people have gone abroad, got trained on various kind of technologies, manufacture of those passive connectivity solutions, have come back pretty recently, and we have started receiving orders for those kind of PCS connectivity solutions, and once we complete initial part of supply, 4 to ₹500 crore looks pretty easy to achieve.

Demand is there for fiber optic cable, demand is there for accessories, passive connectivity solutions, which has given us very good opportunity.

Thank you, sir. The information was quite helpful.

Thank you.

Nahata, sir, good evening. Congratulations on good set of numbers.

My question is on fuse test. Management was quite confident on the fuse test outcome as per last many calls.

Given that fuse test took almost 18 months to rectify and meet standards, what comfort can the management provide from here on on its commercialization and timelines from here on?

Look, Mr. Abhishek, as I said, these are quite complex products.

I might be very confident, but there may be still some improvement required because, assuming a fuse malfunctions, you would have heard one incident in Lebanon. One that 2,000-pound bomb or some 20,000-pound bomb, whatever, the mother of all bomb, what US calls, they dropped, but it did not blast.

It was just lying there. A bomb which could have destroyed the bloody entire locality, which just did not blast, was lying there.

Why? Because the fuse did not function, and bomb didn't blast.

Fuse is a very, very critical piece. It requires a very, very high degree of precision, particularly the proximity fuse, which is where we had some technical issue.

Which is being rectified. When something goes at a speed more than the speed of sound and it measures the distance, the radar inside measures the distance between ground and the bomb, you can imagine what kind of precision is required.

Those things are going to be a little more calibrated. That is happening now.

I'm sure by April, May, when the next phase of test takes place, it should be successful. If you ask comfort, I can only say that I am quite confident that it would happen.

It has taken years for companies to reach to that level of precision, but we are doing it a much faster pace, but it needs some patience. Military products, you need very high degree of precision, particularly something like fuse, which is a small part of the bomb, but the most critical part of the bomb.

I understand that. What was worrying was it took almost 18 months to get the next date from DRDO timelines.

If Mahendra Nahata (Managing Director):

It was not the DRDO giving time. It was the ammunition which was not available from the MIL, the Munition India Limited.

Yes, yes, yes, sorry. On that, yeah.

That ammunition is available with us now. DRDO testing is not the problem.

Problem was the ammunition, which is now being available with us. It would not take that much time.

Okay. Can you just provide some kind of revenue visibility for 2026-27 in case of defense line of products and all?

Defense line of products, I think we can should be something like ₹400 to ₹500 crore, something like ₹400 to ₹500 crore.

Next year?

Next year.

Okay.

Look, defense line, you must understand, it takes a lot of time to build a defense capability. Approval of product itself is a big issue.

Once you get in, some product is approved, then you continue to sell it. Like BMP upgradation, for example, we are one of the five shortlisted parties.

Trials will take place, the tender would happen, and open assuming we win, assuming, I am not saying that we will win, assuming, then we straightaway get thousands of crores rupees order, and consistently we are supplying for 7, 8 years. Takes time, but I'm sure larger tenders also will come in our way.

We look forward to that day when probably what is being envisaged is actually getting achieved.

Sure.

Yeah. Just one last squeeze.

The active communication devices and the data centers and the huge cloud that is expected over the next few years because of the income tax holiday that has been provided by the government, what kind of opportunity that HFCL can get it from there?

Look, basically, when new data centers are getting created, all whatever we are supplying to data centers would be demand in India also. Right now, we are exporting.

Then there will be demand in India. Right now, data centers are coming up in India.

Some of the key players are putting up data centers, but still not to the level what is happening worldwide. If you look at United States, for example, one company just announced that they are going to spend $150 billion in capex on data centers.

Just one company. The scale is much different.

Yes, with this concessions, I expect that more data centers will come up in India, because data generation is huge in India because of our own population and usage of mobile phones and the data generations out of that. There is a lot of data generation, a lot of storage and those capacities are required in India.

When that happened, the same products which you are exporting would be required in India also. That is the increase in market size for us, and we can increase our capacity to serve our own country's requirement.

Okay. Thank you so much.

Congratulations on green set of numbers. I just wanted to know what is the current average realization for bare optical fiber?

Bare optical fiber, currently the price would be different for different type of fibers, but I will tell you, as a general from the point of view of comparison, what we have been doing previously, the price was about ₹250 per kilometer in December. Now, February, this December number I'm giving you because that was the price we purchased on average price in that particular quarter.

Now if you see, this prices has gone up. This would be nearly about, I would say ₹300 plus.

Okay. Do we also sell bare optical fiber or we just use it for our internal

We don't sell. We don't have the capacity to sell.

We are rather buying bare optical fibers from other players.

Right, sir. Also, in light with so much capacity coming on-stream next year, can you give us some guidance on the numbers?

How do you see it?

Look, I would not give a guidance. I can only give my perception and expectation, because guidance would be a wrong word to use.

Fiber optic cable, what we have been looking at about ₹2,400 crore of revenue from fiber optic cable business this current year. Next year, I think it should be able to cross ₹3,500 crore.

This is not my guidance, but my estimation on the basis of current demand what we have in the country and export, and also at the same point of time the passive connectivity solution demand which I expect, and also the shortage in the market. That is my best, I would say more or less conservative expectation that we should be able to reach to ₹3,500 crore in fiber optic cable business in the next financial year.

Right, sir. On the margins, you can

No, just I will answer him. Just I Operator:

Margins, I think it should remain around 10% PBT margin should always be there.

Thanks. EBITDA, it will be 18% then?

Somebody in this range only?

EBITDA would be same range. If PBT is the same range, EBITDA would be in the same range.

Right, right. Thanks.

Thanks a lot, sir. That helps a lot.

am I audible?

Is it fine now?

What I wanted to ask is the optical fiber cable and optical fiber production capacities that you're adding, is that going to commence, and what will be the revenues that will bring in?

Your voice has broken again and again. I could not even understand your question.

Is it okay now, sir?

It is right now okay, but please tell your question again.

Sure. The optical fiber cable and optical fiber production capacities that you're going to expand, when will that commence, and what revenues will that bring in?

No, no, I already said that that production capacity enhancement is already in process. It is already happening.

It is happening step-by-step, because all machines are not delivered at the same time. It is already in process.

The cable capacity enhancement, whatever the current stage we have planned, would finish by May, June this year. The fiber capacity expansion would finish by December this year, because that machine's delivery is a longer time frame, so that will finish by November, December this year.

That is as far as capacity enhancement is concerned. As far as the revenue is concerned, I just now said, to the best of my expectation, depending on the current situation and best of my knowledge and expectation, instead of ₹2,400 crore which we have planned for the current year, we should be able to reach ₹3,400 to ₹3,500 crore in the next financial year for the fiber optic cable business.

Sir. Thank you so much for answering my question, sir.

All the best.

Thank you.

Yeah.

Am I audible now?

I am using my handset. Am I audible now?

you are audible. Go ahead, go ahead, Mr.

Malhotra.

What I was saying, when the outlook for the OFC business and the defense business is so good, why are we diluting the existing shareholders? We have done equity raise in 2021, '23, and now again in '25.

Our debt to equity is still quite low. Why the equity raise at such low valuations?

You need money for growth. Now, question is, if you need money for growth, more working capital, and what else you can do?

You have to raise money, and of course

Sir, you can always raise debt, because debt is always cheaper.

No, it's not necessarily that we will raise debt only. We have raised some debt also, we have raised equity also, both.

It's a combination of both.

Because your stake has come down from 39 to 28 in the last 3 years when the prospects of the business are the best, so that was my

concern. We have not diluted our stake.

We have invested our own money in the company.

I was saying promoter shareholding. I got your point.

Sir, second point was the percentage of the order book towards government is right now close to 70% as per the presentation, but percentage of the current revenues is only 20% because 80% is private. Am I

right? That is right.

That is right, you must understand.

That means the mix in the future will change?

No, no, no, no, no. You must understand.

Good question and good observation. Look, what happens, the government orders have come in a bunch.

BharatNet, for example, which is a 3-year order, but is a multiple thousand crore order. When you see the order book, it looks large, but execution is in 3 to 4 years.

Execution takes time. Percentage of revenue goes down, whereas the private sector orders come in smaller numbers: ₹200 crore, ₹300 crore, ₹100 crore, ₹50 crore, and that execution is also faster.

Private sector order booking will remain always lower than the government sector, but revenue would always be higher from the private sector than the government sector. Again, another point you should see, the O&M revenue is also in the part of the government order.

O&M revenue bunched with the order book of the current equipment and all that, becomes even higher. The current order book for the O&M itself is about ₹3,000 crore.

Because the O&M, it looks higher.

Sure, sir. Sure.

Thank you. That's it, sir.

Thank you.

Hello?

Yeah. Namaskar, Mehta ji.

Bhai sahab, kahan reh gaye the aap? Main to aapka wait hi kar raha tha.

Sir,

main to qatar mein hoon shuru se hi, to jaisa kafi kal bahut exhaustive detailed call raha, to sir uske liye aap sabhi logo ka abhinandan, sir. Very detailed one.

Mera ek hi observation hai, aur usme agar Jain sahab thoda prakash dalein. When we look at our revenues on a consolidated basis, the revenue is at ₹1,211 crore, and when we look down at the profitability, the profit from the telecom product is at ₹202 crore with revenue of telecom product at ₹722 crore.

Jain

sahab? Jain

ji, haan

ji. Haan, sir, jab hum standalone ke number dekh rahe hain, to wahan telecom product ka revenue dikha raha hai ₹702 crore ka aur profitability dikha rahi hai ₹137 crore ki.

To thoda ye samjhayein, sir, ki ₹20 crore se revenue badhta hai aur 60-₹70 crore se hamara profit increase ho jata hai. To ye consolidation mein, sir, ye ise kaise samajhna chahiye niveshakon ko?

Is par sir thoda prakash dalein. Sir, isme kya hai, jo HFCL standalone basis is that it has multiple businesses, including optical fiber cable, telecom product, turnkey projects, and all that.

When we come to the consolidation, it is mainly HTL Limited and HFCL Inc, which is 100% subsidiary in US. These two companies are exclusively into optical fiber cable business, where the margins are also higher.

What happens eventually, HFCL and HTL manufactures cable here in India, and exports to HFCL Inc. In turn, HFCL Inc sells material to various respective customers.

This last quarter, December ended, a lot of inventories got stuck there, so that this revenue has not increased substantially, but the profitability is increased because of the revenue mix. HTL and HFCL Inc, they are 100% optical fiber cable.

That is how it is in console basis profitability looks much better than the standalone.

Going ahead, the sales will get reflected, and then at that time the profitability will not be there. We have booked the profitability for this quarter?

Profitability will be there. Profitability is booked only when the final sale takes place to the end customer.

Better would be sir, I'll take it offline. Pura samajh

mein nahi aaya. Because when we sell it to our own company, we don't book the revenue or profit.

It is booked when it goes to the ultimate customer. With this unfortunate incidence of tariff and all that, this all things got stuck, and that's how you see this anomaly.

Sir. Jain

sahab, offline Jain, haan, haan. We can discuss offline.

Sir, can you give me the net debt number and the cost of fund currently, aur hamari rating

kab due hai, sir, revision ke liye? Rating hamari May, June mein due hoti hai, but we will try, post this December quarter result, we can approach again to the rating agency.

Net debt number kya hai,

sir? Sir, kareeb ₹1,500 crore hai, including term loan, working capital facilities, some bill discounting and all that, some payment to these MSME vendors and all that.

All taken together, it is ₹1,500 crore.

Ek, sir, request aur tha, sir. The level of work that we are doing currently and the type of businesses we have, we should also look at people like CRISIL or ICRA or India Ratings as our consultant for evaluating our credit rationale also.

That's a humble suggestion from my side if that could be looked ahead in the near future, sir.

We can consider that, but we are associated with CARE for very, very long time. We can explore all those possibilities.

Yeah.

Sir. Thank you, sir, and we hope for good performance going ahead.

Dhanyawad, sir.

Sir, my only question was could you please throw some light on the guidance for 5G businesses for the next year and on the revenue front? Defense you have guided, but the 5G product side revenue guidance for the next year?

There are products which are used for 4G, 5G, 6G, everything. Routers, for example, that's used for everything.

The UBR is used for all 4G, 5G, everywhere. I would not be saying 5G products, but telecom products I would say.

I would expect something like ₹500 crore.

Okay. Sir, for services business, I understood that you said that O&M is also going to start contributing, and that is the reason why we have made losses because we are spending money at the moment.

Any guidance for services business going forward as well?

As I said, army alone we should be getting ₹170 crore a year. There are BNG, OTN, UBR, all this.

In 3 years' time, within 2 to 3 years' time, 4 to ₹500 crore would be our revenue from O&M.

Okay. Ex-O&M, for normal service business, we are not continuing with that is it?

No, we are not doing any other normal service business, except doing EPC construction and all that, but no other service business we are doing. It's the O&M.

Sir, EPC business guidance would you be able to give?

I would say roughly about ₹1,000 crore.

₹1,000 crore a year.

In the next year.

That is much lesser than what we have been doing in the past, is it?

No, this year we would be doing ₹1,500 crore. We are intentionally not doing much of EPC, because that's not the area we are much interested.

We are more interested in defense business, fiber optic cable business, telecom equipment business. EPC is not our priority business.

I would have got more contracts for EPC. Even if I want today, I can get another ₹1,000 crore contract for EPC, but I am not taking that.

Sir. Got your point.

Thank you so much, sir. All the best.

Thank you.

Thank you very much, all my friends, shareholders, for this earning call of quarter three. I am quite sure, based on the current order book and current demand scenario of the products which we manufacture and the turnkey contracts we are in process of executing, that we'll continue to maintain the momentum which we have shown in Q3, and the same momentum should continue to happen in the coming quarters also, because the demand of our key products like fiber, fiber optic cable, and also some of the telecom equipment like routers is very, very good.

It's a very good demand, and we have got confirmed orders in hand from large players. More orders are expected in near future and mid-term and long-term future also.

We will maintain the momentum what we have shown in the third quarter, and expect that company would be able to show even further improved performances in the coming quarters. Thank you very much, gentlemen.

Thank you for being with us today.