Shares of HFCL, a key player in telecommunication equipment manufacturing, have seen an extraordinary rally, climbing 109% in 2026 and 90% over the past year. This impressive performance has pushed the stock into overbought territory, with its Relative Strength Index (RSI) reaching as high as 91.8, signaling a potential for a market correction or consolidation.
Analysts Advise Caution Amid Overbought Conditions
Following its ascent to a 52-week high of Rs 147.75, market experts are evaluating the next moves for HFCL stock. Virat Jagad, Senior Technical Research Analyst at Bonanza, noted a strong breakout supported by significant volume after a period of consolidation. While acknowledging the robust momentum, Jagad warned of overbought conditions, suggesting new entries should only be considered on minor dips or during consolidation phases, specifically near Rs 142–145 with a stop loss at Rs 136. Upside targets are set at Rs 155 and Rs 165 for existing holders.
Sachin Gupta, Vice President – Technical Research at Choice Broking, echoed concerns about overheated momentum indicators. He advised traders against chasing current prices, recommending a wait for a healthy correction towards the Rs 132–Rs 135 zone for more favorable risk-reward opportunities. Gupta emphasized that the broader bullish trend for HFCL stock is expected to remain intact as long as it stays above the crucial support level of Rs 128, with a potential move towards the Rs 160 mark in the coming weeks if momentum continues.
Strong Q4 Earnings Fuel Rally
The recent surge in HFCL shares is largely attributed to the company's robust Q4 earnings and substantial new order acquisitions. For the quarter ending March 2026, HFCL reported a significant turnaround, posting a net profit of Rs 178.5 crore, a stark contrast to the net loss of Rs 81.43 crore in the same period last year.
- Revenue Growth: Revenue climbed 17.4% year-on-year to Rs 1,824.12 crore from Rs 800.72 crore.
- Total Income: Total income stood at Rs 1,846.38 crore, up from Rs 814.36 crore.
- Order Book: The company achieved its highest-ever order book at Rs 21,206 crore for FY2025–26, significantly higher than Rs 9,967 crore in the previous fiscal year.
Beyond the impressive financial results, HFCL has secured several key orders recently. On May 4, the firm received purchase orders worth Rs 84.23 crore for the supply of optical fiber cables to a leading private telecom operator. Additionally, in April, HTL Limited, a material subsidiary, secured a substantial Rs 1,366 crore order for optical fiber cables from a renowned tier-1 customer. These wins have significantly bolstered positive sentiment around the stock.
HFCL Limited specializes in manufacturing telecommunication equipment, optical fiber cables, and intelligent power systems, serving the telecommunication industry with products like optical transport, power electronics, and broadband equipment.