HCL Tech Share Price: HCL Technologies saw its shares take a sharp plunge on Tuesday January 14. The stock began trading at Rs 1,936.10 and quickly dropped to a low of Rs 1,797.75 during early hours, down over 9%. This sudden decline in the stock price of the company came shortly after the company announced its Q3 earnings update on January 13.
The company’s stock, which touched a 52-week high of Rs 2,002.35, now seems to be under pressure despite its positive financial performance.
Here are the four main reasons contributing to this downturn: HCL Technologies Q3 earnings
HCL Technologies reported a 6% growth in its consolidated net profit for the December 2024 quarter, reaching Rs 4,591 crore, compared to Rs 4,350 crore in the same period last year. The company’s revenue from operations rose by 5%, totaling Rs 29,890 crore, up from Rs 28,446 crore in the previous year. Additionally, the company posted an operating EBIT of Rs 5,821 crore, a 4% year-on-year increase and nearly 9% growth compared to the previous quarter.
Additionally, HCL declared an interim dividend of Rs 18 per share, highlighting its commitment to shareholder returns.
HCL Tech: EBIT Margin guidance a disappointment
HCL Tech’s EBIT margins expanded to 19.5 percent sequentially. Though this crossed the company’s guidance band, HCL Tech retained its EBIT margin guidance at 18-19 percent for the full year.
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HCL Tech: Jefferies concerned about narrow revenue guidance
Investment firm Jefferies maintained a “Hold” call on HCL Tech, setting a target price of Rs 2,060 per share. The firm acknowledged that while Q3 margins exceeded expectations, revenue growth fell slightly short. Jefferies also highlighted a narrowed revenue guidance of 4.5%–5% for FY25, pointing to a potentially weak performance in the final quarter. The brokerage raised concerns about cut in revenue/EPS estimates by 1-2% and worsening YoY CC revenue growth trajectory. The stock’s rich valuation is also another reason why Jefferies chose to be on sideline.
HCL Tech: CLSA gives Hold rating
CLSA issued a “Hold” rating for HCL Tech, setting a target price of Rs 1,882 per share. The firm highlighted that the company reported in-line Q3 results with a slight revision in its constant currency revenue growth guidance for FY25.
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