HFCL Ltd Gains 3.44%: 5 Key Factors Driving the Week’s Momentum

2 February: Bearish Technical Momentum Pressures Stock

HFCL Ltd began the week under pressure, closing at Rs.66.38, down 3.19% on the day, underperforming the Sensex’s 1.03% decline. Technical indicators shifted decisively bearish, with the stock trading below key moving averages and bearish monthly MACD signalling weakening longer-term momentum. Despite a mildly bullish weekly MACD and bullish monthly RSI, the overall technical landscape was negative, reflecting investor caution amid mixed signals.

The stock’s price hovered near its 52-week low of Rs.59.83, highlighting vulnerability. On-balance volume showed no clear trend, and Bollinger Bands suggested increased volatility with downside bias. The downgrade to a Strong Sell Mojo Grade in November 2025 continued to weigh on sentiment, reinforcing the cautious stance.

3 February: Gap Up and Quarterly Results Spark Recovery

On 3 February, HFCL Ltd rebounded strongly, opening with a 5.14% gap up and closing at Rs.68.27, a 2.85% gain that outpaced the Sensex’s 2.63% rise. This surge was supported by the company’s Q3 FY26 results, which showed a profitability rebound with quarterly net sales reaching Rs.1,210.79 crore and improved operating margins of 18.84%. Profit after tax rose to Rs.97.62 crore, with EPS at Rs.0.64, signalling operational improvement.

Despite these positives, promoter stake decline raised concerns, tempering enthusiasm. Technical indicators remained mixed, with short-term moving averages showing strength but longer-term averages still bearish. The stock’s high beta of 1.95 amplified price swings, contributing to the sharp intraday volatility.

4 February: Volume Surge and Stabilised Financial Trend

HFCL Ltd saw exceptional trading volumes on 4 February, with over 93.6 lakh shares traded, valued at approximately Rs.64.90 crore. The stock gained 0.88% to close at Rs.68.87, outperforming the telecom equipment sector’s 0.63% rise and the Sensex’s 0.37% gain. Delivery volumes surged by nearly 40% compared to the five-day average, indicating strong accumulation by long-term investors.

Financially, the company reported stabilised quarterly performance with record net sales and improved operating profit margins. However, nine-month PAT contracted sharply by 48.52%, and interest expenses rose by 25.63%, signalling ongoing margin pressures. The debt-equity ratio increased to 0.38, and operational efficiency metrics such as debtors turnover ratio declined, highlighting areas of concern.

Technically, the stock’s price remained above short-term moving averages but below longer-term averages, reflecting a cautiously bullish short-term outlook amid persistent longer-term challenges.

5 February: Continued Volume Surge and Price Rally

On 5 February, HFCL Ltd maintained its upward momentum, closing at Rs.71.04, a 3.15% gain that outperformed the Sensex’s 0.53% decline. The stock was among the most actively traded equities, with over 2.4 crore shares exchanging hands, valued at approximately Rs.170.76 crore. Despite the strong price gains, delivery volumes declined by 19.43% compared to the five-day average, suggesting that short-term traders were driving the rally rather than long-term holders.

Price action showed the stock trading above its 5-, 20-, 50-, and 100-day moving averages, signalling short- to medium-term bullish momentum. However, it remained below the 200-day average, indicating that the longer-term trend had yet to confirm a sustained uptrend. The weighted average price being closer to the day’s low suggested some profit-taking or cautious accumulation.

6 February: Slight Pullback Closes the Week

HFCL Ltd ended the week marginally lower at Rs.70.93, down 0.15% from the previous day’s close, while the Sensex gained 0.10%. This slight pullback followed a strong four-day rally and high trading volumes, reflecting profit-booking and cautious positioning ahead of the weekend. The stock’s price remained near its weekly high of Rs.71.04, maintaining the overall weekly gain of 3.44%.

Technical indicators continue to show mixed signals, with short-term momentum positive but longer-term trends still uncertain. The stock’s Mojo Grade remains at Sell with a score of 37.0, reflecting cautious optimism amid ongoing fundamental and technical challenges.

Key Takeaways

Positive Signals: HFCL Ltd demonstrated resilience with a 3.44% weekly gain, outperforming the Sensex’s 1.51% rise. Quarterly results showed improved revenue and operating margins, while exceptional volume surges on 4 and 5 February indicated strong investor interest and accumulation. The stock’s price trading above short- and medium-term moving averages supports a cautiously bullish short-term outlook.

Cautionary Notes: Despite short-term gains, longer-term technical indicators remain mixed, with bearish monthly MACD and Bollinger Bands suggesting downside risks. The company’s nine-month PAT contraction and rising interest expenses highlight ongoing profitability and efficiency challenges. Delivery volume declines amid rising prices on 5 February suggest some profit-taking and caution among long-term holders. The Mojo Grade remains at Sell, reflecting the need for vigilance.

Conclusion

HFCL Ltd’s week was marked by a transition from bearish technical momentum to a cautiously optimistic phase, supported by stabilised quarterly performance and strong trading volumes. The stock’s 3.44% weekly gain and outperformance of the Sensex underscore renewed market interest, though mixed technical signals and fundamental headwinds advise prudence. Investors should monitor upcoming financial updates and technical developments closely to assess whether the current momentum can be sustained amid sectoral and macroeconomic factors.

Unlock special upgrade rates for a limited period. Start Saving Now →