HCLTech – Paramount growth

HCL Technologies Limited, commonly known as HCL Tech is an Indian multinational information technology (IT) services and consulting company headquartered in Noida. It emerged as an independent company in 1991 when HCL entered into the software services business.

The company is ranked amongst the top five Indian IT services companies in terms of revenues. HCL Tech has focused on transformational outsourcing and offers an integrated portfolio of services including software-led IT solutions, remote infrastructure management, engineering and R&D services and BPO. The company leverages its extensive global offshore infrastructure and network of offices to provide multi-service delivery in key industry verticals.

The company has offices in 52 countries and over 210,966 employees. HCL Tech is on the Forbes Global 2000 list.

Quarterly Earnings Growth

HCLTech registered their consolidated net sales at Rs 26,700 crore in December 2022 quarter which is a growth of 19.5% from Rs 22,331 crore in corresponding last year quarter of December 2021.

The quarterly net profit was reported at Rs 4,096 crore in December 2022 quarter which has risen up by 19% from Rs 3,448 crore in the corresponding quarter of December 2021 in the previous fiscal.

The EBITDA was computed at Rs 6,625 crore in the third quarter of December 2022 which has grown by 17% from Rs 5,648 crore which was computed in the third quarter of December 2021 of the preceding year.

HCL Technologies has made an addition of 5,892 freshers during the third quarter. The company’s total employees count was registered at 222,270 in the quarter. HCL Tech’s attrition rate was at 21.7%, sequentially lower at 23.8 % of the September quarter of the current fiscal year. Women accounted for 29.2% of the total headcount of the global employees.

The company’s board has approved an interim dividend of ₹10 per equity share.

Slight downgrade on MSCI index

According to Nuvama Alternative & Quantitative Research the weightage of HCL Technologies in the MSCI index has been reduced which could trigger an outflow of about $97 million. The proforma weightage of the stock in the index is 1.5 percent and the weightage reduction is of 0.2 basis points which will result in the selling of seventy lakh shares.

Partnership with Microsoft

HCL Technologies has announced a partnership with Microsoft’s quantum cloud computing service, Azure Quantum. Through this partnership, HCLTech will offer businesses cloud-based quantum computing services to its clients, by using Microsoft’s platform as the technology stack. The services will be provided through HCLTech’s Q-Labs, which has already been among one of Microsoft’s partners to offer Azure Quantum credits.

Through this partnership, HCLTech’s Q-Labs will create on-cloud examples of quantum technologies, and will showcase proof of concept (PoC) business use cases to the company’s clients. Linda Lauw, senior director at Microsoft’s Azure Quantum Planning and Partnerships, said that an early phase of Microsoft and HCLTech Q-Lab’s partnership has seen “impressive engagement” from “introducing enterprises to quantum computing foundations and applicatioins explorable right not through PoC pilots.”

Technical Analysis

HCLTech Weekly Candlestick Chart on Sharekhan’s TradeTiger

HCLTech share price made a retracement down to the 50% retracement level where the price received crucial support twice. The price has then made a bullish upmove and faces heavy resistance on the 23.6% retracement level. The price is unable to break through this level as the price made 3 attempts. The price is above the 200-day exponential moving average and the MFI is at 67 points which makes a clear indication that the stock is overbought and currently no fresh entries should not be made into this stock.

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