Following the quarterly results, various brokerage firms have raised the target price for the stock up to Rs 2,125.
The revenue from operations stood at Rs 28,862 crore, higher by 8.2% over Rs 26,672 posted by the company in the corresponding quarter of the previous financial year.
The company has also declared an interim dividend of Rs 12 per share, fixing October 22, 2024, as the record date for the payment of interim dividend. The payment date will be October 30.
Here is how brokerage firms viewed the Q2 results of the company:
Nomura: Buy| Target price: Rs 2,000
Nomura has maintained a buy rating on the stock while raising the target price to Rs 2,000 from an earlier Rs 1,900.
HCL Tech’s 2QFY25 revenue in constant currency (cc) was ahead of the consensus estimate of 0.6% QoQ growth. All three service offerings reported QoQ cc growth with IT Services, ER&D Services and Products & Platforms growing 1.8%, 1.1% and 1.4%, respectively. 2Q had a headwind of 90bp from State Street BPO JV divestment at the company level. HCL Tech noted that while GenAI deal sizes remain small, it drives investments in legacy technology modernization, data pipelines and metadata management and cognitive infrastructure, which have larger deal sizes.
Nuvama: Buy| Target price: Rs 2,125
Nuvama has maintained a buy rating on HCL Tech and hiked the target price to Rs 2,125 vs Rs 2,020
HCL Tech reported a strong Q2FY25, beating estimates as the company delivered strong broad-based growth across verticals. The company has upgraded revenue guidance but maintained its margins guidance. Valuation premium is likely to sustain- higher growth and capital allocation.
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Investec: Sell| Target price: Rs 1,540
Investec maintained its sell rating on the stock while hiking the target price to Rs 1,540 from Rs 1,312
The discretionary spend is up, but with caveats while the bottom end of guidance has narrowed down. Deal wins were lower in H1, however pipeline is at close to all-time high. HCL is up 43% in the last 4 months and FY25E EPS is up 2% post this beat.
Motilal Oswal: Buy| Target price: Rs 2,300
Motilal Oswal maintained a buy rating on HCL Tech with a target price of Rs 2,300
The brokerage firm expects HCL to deliver 18.2% EBIT margin in FY25. This should recover to 18.9% in FY26 as growth improves. The company is also expected to deliver a CAGR of 8.4%/11.5% in USD revenue/INR PAT over FY25-27E. Motilal has raised its EPS estimates by 2.4%/2.7%/3.4% for FY25/FY26/FY27, factoring in the 2Q performance and a recovery in discretionary spending in 2HFY25/FY26E.