HFCL Shares Fall Nearly 4% as Investors Book Profits After Recent Gains

HFCL shares came under selling pressure on September 15, falling nearly 4% even as the broader Indian market traded higher. 

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The stock opened at ₹230.50 on the NSE, below its previous close of ₹233.69, and slipped to an intraday low of ₹225. The decline came after HFCL had ended the previous trading session in positive territory. Around 12.77 lakh shares changed hands during the intraday session. 

The latest fall also adds to the stock’s recent weakness. HFCL has lost more than 9.44% over the past week. 

HFCL Approves Additional ₹820 Crore Capex 

The decline followed a business update from HFCL on September 14. The company’s board approved an additional capital expenditure of ₹820 crore to expand its optical fibre, optical fibre cable and preform manufacturing capacities. 

The fresh investment takes the planned expenditure on these capacity-expansion projects to around ₹1,800 crore. 

Of the additional ₹820 crore, HFCL plans to spend ₹670 crore on preform manufacturing capacity. The remaining ₹150 crore will go towards expanding optical fibre and optical fibre cable capacity. 

The company expects the investment to add 4.60 million fibre kilometres a year to its optical fibre capacity and another 5.64 million fibre kilometres to annual optical fibre cable capacity. Preform capacity is planned to increase by 300 metric tonnes. 

Once the ongoing and proposed projects are completed, HFCL expects to have annual manufacturing capacity of 43.10 million fibre kilometres of optical fibre and 62 million fibre kilometres of optical fibre cable. Preform capacity is expected to reach 600 metric tonnes. 

Expansion Projects Scheduled Through 2028 

HFCL expects the optical fibre and optical fibre cable projects to be completed by July 2028. The new preform manufacturing facility is scheduled to be commissioned by October 2028 and will be developed through wholly owned subsidiary HFCL Technologies Private Ltd. 

The company has an optical fibre cable and connectivity solutions order book of around ₹19,000 crore. It also referred to a pipeline of potential business opportunities and long-term demand for optical communication infrastructure while outlining the rationale for the expansion. 

HFCL plans to fund the capex through a mix of internal accruals, proceeds from preferential warrants already allotted to the promoter and a promoter-group entity, borrowings from banks and financial institutions, and other financing options. 

The September 15 decline came a day after the capex announcement, with the stock extending its recent weakness despite gains in the broader market.