HCL Technologies’ share price surged 3.49% to Rs 1,266.50 during the intra-day trade on Friday, a day after the IT firm reported a 9.8% growth in consolidated net profit, amounting to Rs 3,832 crore, in the second quarter of the current fiscal year. The company’s consolidated revenue from operations surged by over 8% to reach Rs Rs 26,672 crore. HCL Tech expects organic revenue growth for fiscal 2024 to be between 4% and 5% in constant currency terms, as opposed to its prior view, which called for an increase between 6% and 8%, as reported by Reuters. The Board of Directors also declared an interim dividend of Rs 12 per equity share of Rs 2 each of the company for the Financial Year 2023-24. The share price of HCL Tech fell 2.76% in the last one month, while it surged 15.68% in the last six months and a whopping 26.34% in the last one year.
Should you buy, sell or hold HCL Tech shares?
Jefferies: HOLD – Target Price : Rs 1,240
“HCL Tech’s revised organic growth guidance of 4-5% has narrowed its growth premium vs. peers, which may reverse the 11% re-rating its stock witnessed since Mar-23. We cut our estimates by up to 1.5% and expect HCL Tech to deliver 10% EPS Cagr over FY23-26. Maintain Hold with rolled-over Target Price of Rs 1,240 based on 18x PE.”
Axis Securities: HOLD – Target Price: Rs 1,250
“Global uncertainties leading to delayed spending decisions pose a challenging environment to HCL Tech and will impact its performance in the near term. Moreover, supply-side constraints will take some more time to ease off. We recommend a HOLD rating on the stock and assign an 18x P/E multiple to its FY25E earnings of Rs 69.3/share to arrive at a Target Price of Rs 1,250/share, implying an upside of 2% from the CMP.”
InCred Equities: ADD – Target Price: Rs 1,273
“We retain HOLD rating on HCLT with a higher target price of Rs 1,273 (Rs 1,125 earlier) as we roll forward to FY26F estimates. We model a 7.5% US$ revenue CAGR over FY23-26F & a 11.3% PAT (Rs) CAGR and retain our 1.6x target PE/G multiple to arrive at a target P/E multiple of 18x. Improving profitability, prudent capital allocation, healthy cash generation and 4% dividend yield provide cushion, in our view. Accelerated deal velocity, lower attrition and software business improvement are upside risks. Weak execution is a key downside risk.”