• Preform backward integration: HFCL is setting up a ₹580 crore optical fiber preform facility with a capacity of 300 to 310 tons to cover one-third of its internal requirement in the first phase. The project addresses raw materials that account for over 60% of fiber manufacturing costs, which is expected to enhance margins by 5% to 6%.
• Fundraising capital allocation: The company plans to deploy its ₹555 crore warrant fundraise predominantly into preform manufacturing and optical fiber capacity expansion. Remaining funds are earmarked for scaling the defense business during the current year and funding long-term working capital.
• Data center expansion: Surging global demand from AI and hyperscalers led to a recent $1 billion, five-year supply contract with a major data center operator. HFCL is also expanding beyond high-capacity cables of up to 3,700 fibers into data center passive connectivity solutions.
• Supply chain exposure: Geopolitical disruptions in the Middle East have caused minimal impact since preform and fiber are not imported from the region. The company maintains sufficient stock of imported PBT plastic raw material to cover requirements for the next couple of months.