HCL Technologies, one of the leading IT companies in India, witnessed a surge in its share price today after reporting strong quarterly results and raising its revenue guidance for the fiscal year 2023. The stock closed at Rs 1,192.40, up 0.56% from yesterday’s close of Rs 1,185.80 on the BSE.
HCL Tech beats expectations in Q3 earnings
HCL Tech reported a net profit of Rs 3,442 crore in the quarter ended December 2021, marking an increase of 11.2% from the previous quarter and 31.6% from the same quarter last year. The company’s revenue grew by 6.4% sequentially and 18.4% year-on-year to Rs 20,986 crore in Q3.
The company also improved its operating margin to 21.6% in Q3, up from 21.3% in Q2 and 20.5% in Q3 FY22. The company attributed its strong performance to the robust demand for digital transformation services across all verticals and geographies.
HCL Tech also announced an interim dividend of Rs 6 per share for the quarter.
HCL Tech raises revenue guidance for FY23
HCL Tech raised its revenue guidance for the fiscal year 2023, citing the strong momentum in its business and the favourable market conditions. The company now expects its revenue to grow by 16.5-17.5% in constant currency terms for FY23, up from its earlier guidance of 15-17%.
The company also maintained its operating margin guidance of 19-21% for FY23.
HCL Tech’s CEO C Vijayakumar said that the company is confident of achieving its revised guidance and delivering industry-leading growth in FY23.
“We have a strong pipeline of deals across all service lines and are well-positioned to capture the opportunities arising from the accelerated adoption of digital technologies by our clients,” he said.
HCL Tech gains market share and recognition
HCL Tech also gained market share and recognition in the IT industry in Q3. The company won 22 transformational deals in Q3, spanning across various sectors such as banking, financial services, insurance, life sciences, healthcare, manufacturing, retail, consumer goods, energy, utilities, public services and telecom.
The company also received several accolades and recognitions from industry analysts and rating agencies. For instance, HCL Tech was named as a leader in Gartner’s Magic Quadrant for Data Center Outsourcing and Hybrid Infrastructure Managed Services for both Europe and North America.
HCL Tech was also ranked as the third-largest IT services provider in India by IDC in its latest report on the Indian IT services market.
HCL Tech stock outperforms peers and indices
HCL Tech’s stock has outperformed its peers and indices in the past year. The stock has gained over 35% in the past 12 months, compared to a 28% rise in the Nifty IT index and a 25% rise in the Sensex.
The stock has also outperformed its larger rivals such as TCS, Infosys and Wipro, which have gained 24%, 31% and 33% respectively in the same period.
HCL Tech’s stock is currently trading at a price-to-earnings ratio of 21.43, which is lower than the industry average of 27.86.
Analysts are bullish on HCL Tech’s stock and have given it a buy rating with an average target price of Rs 1,307.67, implying a potential upside of over 9% from its current level.
