HCL Tech Shares Fall Despite Brokerage Optimism On Q4 Deal Wins

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Analysts cheered HCL Technologies Ltd.’s strong deal wins and build-up of its digital capabilities even as the software services exporter missed estimates in the quarter ended March.

The company’s net profit slumped 72.1% sequentially to Rs 1,111 crore in the fourth quarter. A surge in tax expenses to Rs 2,256 crore from Rs 502 crore in the three months ended December dragged the bottom line. Its revenue rose 1.75% quarter-on-quarter to Rs 19,641 crore.

HCL Technologies expects revenue in FY22 to grow in double digits in constant currency terms. It expects EBIT margin for FY22 to range between 19% and 21%. The company said it registered its “highest-ever new deal booking” in the reported quarter at $3.1 billion, with an all-time high exit pipeline as well.

Still, some analysts saw this revenue growth guidance as conservative, indicating that uncertainty still persists in outlook. Of the 46 analysts, 41 have a ‘buy’ rating, three suggest a ‘hold’ and two recommend a ‘sell’, according to Bloomberg data. The average of 12-month consensus target prices implies an upside of 21.4%.

Shares of HCL Technologies fell as much as 3.3% to Rs 924 compared with a 1.51% gain in the Nifty 50.

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