HFCL's Stellar Performance and Market Reaction
Shares of HFCL, the telecommunication equipment manufacturer, have experienced a remarkable rally, gaining 109% in 2026 and 90% over the past year. This surge propelled the stock to a 52-week high of Rs 147.75 in the previous trading session. However, the stock saw a slight pullback of 3.75% to Rs 141.10 in the current session on May 8, 2026.
The rapid ascent has pushed HFCL into strongly overbought territory, with its Relative Strength Index (RSI) climbing to 91.8. An RSI above 70 typically indicates that a stock may be overbought, suggesting more buyers than sellers and potentially signaling a short-term correction or consolidation phase.
Driving Factors: Strong Earnings and Order Wins
The impressive rally in HFCL shares follows a robust performance in its fourth-quarter (Q4) earnings and a series of substantial order wins. The company reported a significant turnaround, posting a net profit of Rs 178.5 crore in Q4, a stark contrast to the net loss of Rs 81.43 crore in the same period last year.
Furthermore, HFCL's revenue for the March 2026 quarter climbed 17.4% year-on-year to Rs 1,824.12 crore. The firm also achieved its highest-ever order book, reaching Rs 21,206 crore in FY2025-26, a substantial increase from Rs 9,967 crore in the previous financial year.
Recent order acquisitions have further fueled positive market sentiment. On May 4, HFCL secured purchase orders worth Rs 84.23 crore for optical fiber cables from a prominent private telecom operator. Additionally, in April, its subsidiary HTL Limited received a significant order valued at Rs 1,366 crore for the supply of optical fiber cables to a tier-1 customer.
Expert Outlook: Navigating Overbought Territory
Market analysts are closely monitoring HFCL's trajectory, acknowledging the strong momentum while also highlighting the overbought conditions.
Virat Jagad, Sr. Technical Research Analyst at Bonanza, noted that HFCL has seen a strong breakout with significant volume expansion after consolidating for months. He cautioned that an RSI near 89 reflects strong momentum but also signals overbought conditions, suggesting that fresh entries should be considered only on minor dips or consolidation. For new positions, an entry near Rs 142–145 with a stop loss at Rs 136 was recommended, targeting Rs 155 and Rs 165.
Sachin Gupta, Vice President – Technical Research at Choice Broking, echoed concerns about overheated momentum indicators, with the RSI around 91. He advised traders to consider waiting for a healthy correction toward the Rs 132–Rs 135 zone for better risk-reward opportunities rather than chasing current prices. Gupta stated that as long as HFCL remains above the crucial support level of Rs 128, the broader bullish trend is expected to persist, with a potential move towards the Rs 160 mark in the coming weeks if momentum continues.
Existing holders are generally advised to continue riding the trend with a trailing stop loss, as the stock consistently forms higher highs and higher lows, indicating sustained buying interest despite the short-term overbought status.