Foreign institutional investors have sharply increased their exposure to HFCL, more than doubling their stake in the company to 15.7% in the first quarter, even as the stock has risen 200% so far in 2026.

HFCL, an Indian telecom equipment and solutions provider, has drawn investor attention on the back of demand linked to artificial intelligence-driven data centres, a record order book, stronger earnings, capacity expansion plans and growing ambitions in the defence segment. The global rollout of AI infrastructure has intensified demand for high-capacity networking gear, optical fiber and related equipment—areas HFCL supplies—placing the company within a broader investment theme around data-centre buildouts. These factors have also led some brokerages to take a more constructive view on the stock.

According to the report, brokerage Deven Choksey sees a further 75% upside for HFCL. Analysts cited in the source continue to suggest a "Buy" view, pointing to what they describe as a robust growth runway for the company.

The company's rise has been associated with its positioning in areas tied to data-centre infrastructure and AI-related demand, alongside its efforts to expand capacity and build its defence business. India's push for greater self-reliance in defence manufacturing and telecom infrastructure has created additional policy tailwinds for domestic equipment suppliers like HFCL. The report said these developments have helped HFCL emerge as a preferred stock among foreign investors during the quarter.

The Economic Times report framed HFCL's performance around three themes: the reasons behind the stock's rise, the company's growth runway, and why analysts still maintain a "Buy" recommendation despite the sharp year-to-date rally.