Up 60% in a month! RIL-backed multibagger stock headed for 40% upside post defence foray

Multibagger stock to buy: Domestic brokerage firms continue to remain positive on a smallcap multibagger stock which has zoomed nearly 12 times in the last six years, while the stock is up 60 per cent in the last one month. Despite the recent rally, they still see nearly a 40 per cent upside in it, thanks to its foray in defence space. The stock is HFCL Ltd.

HFCL is a technology plaueyr with a vertically integrated presence across optical fiber and cable, telecom networking products, and defence electronics. Its portfolio spans high fiber count cables, routers, WiFi, data centre solutions, and defence systems including electronic fuses, radars, and thermal weapon sights, serving domestic and global customers.

Shares of HFCL hit Rs 108 mark on Wednesday, but settled at Rs 107.10, commanding a market capitalization close to Rs 16,400 crore. Shares of HFCL have surged 1,140 per cent or 12.4 times from its lows at Rs 8.75 in March 2020. The stock has soared 285 per cent in the last five years, while it has jumped nearly 55 per cent in 2026. It will announce its Q4 earnings on Thursday, April 30.

HFCL experts take

HFCL secured two large orders aggregating Rs 11,525 crore during March–April 2026. Growth visibility is further strengthened by a rising share of product-led and private orders, strong hyperscale data-centre demand for ultra-high-fiber-count OFCs, planned capacity expansion 42.4 mn fkm by FY27 and backward integration into preform manufacturing, said Geojit Investments.

"HFCL’s foray into defence vertical offers medium-term revenue visibility, with electronic fuses nearing commercialization and a diversified portfolio targeting Rs 400-500 crore revenue in FY27, scaling to Rs 1,000 crore by FY28; this is further strengthened by the recent Rs 25 crore Spiral EHL acquisition, consolidating aerostructures, radar, and thermal weapon systems under HASPL, it said.

HFCL is set for strong growth across both defence and optical fiber cable segments, driven by execution, vertical integration, and favorable market shifts. In defence, the upcoming ammunition complex with a capex of Rs 1,390 crore provides a first-mover advantage. A structural shift from telecom to data center and AI infrastructure is boosting demand for higher fiber cables up to 6,912 fibers, said Arihant Capital Markets.

"The indigenous technologies, such as electronic fuzes with a 96 per cent success rate and near monopoly positions in thermal weapon sights and wire harnesses, support future growth. The electronic fuzes trail is expected by May/Jun 2026. The order book expanded to Rs 2,200 crore through Spiral acquisitions and growing exports to Europe, Africa, and the Middle East," it said.

The higher fiber cable price realizations are more than 2 times of conventional cables. The OFC capacity is expanding to 40 million f.km by December 202026 to cater to demand from 5G, data center, and the upcoming 6G technology. It has signed a $1.1 billion long-term contract from a global hyperscaler to supply over the next 5 years, Arihant adds.

FY26 proved to be HFCL’s point of inflection where on one side the unprecedented demand wave for fibre cables by hyperscalers witnessed in the latter part of FY26, followed by a mega-contract from a global hyperscale and on another side many of its products in the defence segment went to advanced stages of testing providing more visibility, said Sunidhi Institutional Research.
 

Reliance Industries' stake in HFCL

Mukesh Ambani-led Reliance Industries Ltd owns a significant stake in HFCL through its subsidiaries. Reliance Ventures owned 2,26,81,422 equity shares, or 1.48 per cent stake, while Reliance Strategic Business Ventures (RSBVL) held 4,85,32,764 equity shares, or 3.17 per cent stake, in the company as of March 31, 2026. RIL's total shareholding stood at 4.65 per cent as of Q4FY26.

Technical View

Following a recent low, the stock has attracted buying interest at lower levels and has delivered a breakout from a cup base formation, indicating a potential trend reversal. Over the past four weeks, price action on the daily chart reflects a consistent higher high–higher low structure, supported by a series of bullish candles, said Geojit.

"Momentum indicators remain favorable, with RSI in the bullish zone near 77 and a positive MACD crossover signaling strengthening upward momentum. The setup presents a favorable risk-reward profile, with support around Rs 86 and upside potential toward Rs 150, making it suitable for a breakout-driven positional trade," it added.
 

HFCL target price

"We estimate revenue, ebitda and profit CAGR of 22 per cent, 45.2 per cent and 69.5 per cent CAGR over the period of FY25-28E. RoCE/RoE is expected to improve from 5.6 per cent/4.3 per cent (FY25) to 13.4 per cent/14 per cent in FY28E, respectively. We maintain our 'buy' rating at a target price of Rs 147 per share," Arihant Capital said.

"We expect the topline, Ebitda and PAT to grow at a CAGR of 29 per cent, 47 per cent and 74 per cent over FY26e-FY28e, translating into an EPS of Rs 5.2 for FY28e. We have valued HFCL on SOTP; assigning EV/Ebitda target multiples of 15 times for OFC, 20 times for defence, 8 times for telecom and 5 times for EPC businesses, we derive a target price of Rs 130," said Sunidhi.

The long-term outlook for HFCL remains favorable, supported by a structural upcycle in fiber demand, rising export contribution, margin expansion toward 18-20 per cent  Ebitda, and balance-sheet strengthening post QIP and promoter infusion, said Geojit with a 'buy' rating and a target price of Rs 150.