HCL Technologies Reports Strong Q2 FY24 Earnings

HCL Technologies Reports Strong Q2 FY24 Earnings
HCL Technologies Reports Strong Q2 FY24 Earnings
HCL Technologies Reports Strong Q2 FY24 Earnings
HCL Technologies Reports Strong Q2 FY24 Earnings

HCL Technologies Reports Strong Q2 FY24 Earnings

HCL Technologies Reports Strong Q2 FY24 Earnings

HCL Technologies Reports Strong Q2 FY24 Earnings

HCL Technologies, one of India’s leading IT services companies, has announced impressive financial results for the second quarter of fiscal year 2024. In early trading on Friday, the company’s share price surged by over 2%, reaching ₹1,258.00 per share on the BSE.

Robust Growth in Net Profit and Revenue

The Q2FY24 performance shows HCL Technologies’ exceptional strength in the market, with a remarkable 8.55% quarter-on-quarter (QoQ) growth in net profit, reaching ₹3,833 crore. The company also witnessed a 1.4% QoQ growth in consolidated revenue, totaling ₹26,672 crore. In constant currency terms (CC), the revenue expanded by 1% QoQ.

Revised Revenue Guidance for FY24

Despite the strong performance, HCL Tech adjusted its year-on-year (YoY) organic revenue growth guidance in constant currency terms for FY24, reducing it from 6-8% to 4-5%. This strategic move has been met with mixed reactions from market experts.

Analyst Views on HCL Technologies

  • Morgan Stanley: The reduction in revenue guidance was somewhat anticipated, and the focus now shifts to the company’s ability to outperform its peers in the second half of the fiscal year. Morgan Stanley maintains an ‘Overweight’ rating on the stock and sets a target price of ₹1,400 per share.
  • Kotak Institutional Equities: HCL Technologies reported in-line revenue growth for Q2FY24, and the company’s deal pipeline remains strong. Kotak maintains a ‘Buy’ rating on the stock with an unchanged target price of ₹1,410 per share.
  • Motilal Oswal: Despite the weak Q2 performance, HCL Tech’s valuations offer a margin of safety. The company’s focus on Cloud services positions it well in the current market. Motilal Oswal reiterates a ‘Buy’ rating on the stock with a target price of ₹1,410 per share.
  • JM Financial: HCL Technologies’ performance was as expected, and the firm now predicts solid growth for FY24. JM Financial maintains a ‘Hold’ rating on the stock and raises the target price to ₹1,250 per share.
  • Antique Stock Broking: Despite missing revenue expectations, HCL Technologies’ strong organic growth and improved margins are promising. The brokerage reiterates a ‘Buy’ rating with a target price of ₹1,475 per share.
  • Sharekhan: HCL Tech’s Q2FY24 numbers were healthy, with revenue growth in line with market expectations. Sharekhan maintains a ‘Buy’ rating on the stock and raises the target price to ₹1,400 per share.

Positive Prospects for HCL Technologies

HCL Technologies’ performance indicates a robust presence in the IT services sector, and its focus on Cloud services and cost optimization initiatives offers potential for growth in FY25. The stock continues to trade positively, with a 2.32% increase in early trading to ₹1,252.40 per share on the BSE.

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