Telecom Stock Falls Over 2% Despite Securing Rs 2,329 Crore Optical Fibre Cable Supply Agreement

On Tuesday, Indian equity benchmark indices traded higher, with the benchmark Nifty 50 index rising 33.80 points (0.14 per cent) to 24,114.20. Amid the market movement, HFCL share price fell 2.40 per cent to Rs 243.12 after the company announced a three-year agreement for the supply of high-quality, high-fibre-count Optical Fiber Cables through its overseas wholly owned subsidiary.

The agreement, awarded by a global multinational corporation, is estimated to be worth around USD 244 million, equivalent to approximately Rs 2,329 crore, over its tenure. The deal strengthens HFCL's international order pipeline and expands its presence in the global optical fibre cable market.

Supplies to Begin From CY27
Under the agreement, HFCL will supply multi-million fibre kilometres of high-fibre-count Optical Fiber Cables in accordance with the customer's specifications. The supplies will be made across three calendar years, beginning in CY27 and continuing through CY29, with the overall execution period extending up to December 2029.

The contract is international in nature and has been secured through HFCL's overseas wholly owned subsidiary.

HFCL said the agreement reflects its ability to secure long-duration engagements in complex optical fibre cable products that require specialised manufacturing capabilities, technological depth and precision at scale.

Deal Adds to HFCL's Global OFC Presence
The company highlighted that only a limited number of manufacturers globally possess the technology and manufacturing capabilities required for such high-fibre-count OFC products.

HFCL believes the latest agreement further strengthens its competitive position in the international optical fibre cable market and supports its longer-term growth prospects in the segment. The company also clarified that its promoter and promoter group have no interest in the entity awarding the contract. The transaction does not fall under related-party transactions.

The three-year supply arrangement provides HFCL with visibility over international OFC deliveries through CY29, with the Rs 2,329 crore estimated contract value spread across the tenure of the agreement.
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Disclaimer: The article is for informational purposes only and not investment advice.