HCL Tech Share Rise 3% Ahead Of Q3 Resulta Next Week; Know What To Expect

Shares of HCL Technologies rose over 3% to Rs 1,507.2 in Wednesday trade on BSE ahead of its third-quarter results due on Friday, January 12.

The stock has also surged 33% in the past six months, while it has rallied 40% in the last year.

In Q2 FY24, HCL Technologies reported 10% growth in its consolidated net profit at Rs 3,832 crore. The same stood at Rs 3,489 crore in the last year period.

Its revenue from operations during the period rose 8% to Rs 26,672 crore against Rs 24,686 crore in the same period last year.

In Q2, in constant currency terms, revenue was up 1% sequentially and 3% year-on-year (YoY). Segment-wise, services revenue rose 3% (CC), while digital revenue was up 4%.

Technicals

HCL Technologies | Resistance: Rs 1,500 | Support: Rs 1,400

HCL Tech has been moving sideways, maintaining support near Rs 1,420 level. The level of Rs 1,500 level is acting as the barrier. The stock would need a decisive breach above this level to indicate a breakout. With the Q3 results outcome expected this week, fluctuations can be anticipated and a break below Rs 1,400 would weaken the bias for the stock.

What To Expect

Motilal Oswal Financial Services Limited, said: “With a strong margin outperformance, HCLT remains confident of achieving its margin guidance of 18-19%. Higher exposure to Cloud, which comprises a larger share of non-discretionary spending, offers better resilience to its portfolio in the current context amid higher demand for Cloud, Network, Security, and Digital workplace services. We expect HCLT to emerge stronger on the back of healthy demand for these services in the medium term.”

Axis Securities said that they expect HCL Tech to report revenue growth of 6.5% QoQ in rupee terms while delivering an operating margin expansion of 65 bps. Key factors to watch out for are a) Deal TCV/deal pipeline, b) Pricing scenario, and c) Outlook on growth, operating margins, and P&P business.

Further, HCLTech is expected to report sequential revenue growth at 4.4% in CC terms in a seasonally strong quarter, aided by contribution from ASAP Group and ramp-up of the Verizon deal. EBIT margin to improve by ~50 bps QoQ, aided by operational efficiencies and stronger revenues, Sharekhan stated.