HCL Technologies: Good show

 

The stock of HCL Technologies (HCL) was up over 5 per cent last week, as markets cheered the better-than-expected financials delivered by the company.

In the December quarter, HCL’s revenues grew by 4.9 per cent Q-o-Q (5.6 per cent in constant currency) in dollar terms, the highest among top-tier IT players. The company’s operating margins were relatively stable at 19.6 per cent for the third quarter.

Geographically, all the regions reported double-digit growth on Y-o-Y basis, indicating broad-based traction. Client additions were also healthy for HCL. At 86.6 per cent, the company’s utilisation rate is among the highest in the industry. One point of concern for HCL is the rise in attrition, which is at 17.8 per cent currently.

 

The stock still trades at a discount to other peers. On a trailing basis, the price-earnings multiple for HCL is 16 times. Peers such as Wipro, Infosys and TCS trade at 17-21 times. If the consistent show from HCL continues, it may well bridge the gap in valuations soon.

c:set var="prUrl" value="https://premium.thehindubusinessline.com" />

Read further by subscribing to

The Hindu Businessline

What You'll Get

  • Web + Mobile

    Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.


  • Exclusive portfolio stories and investment advice

    Gain exclusive market insights from the Hindu Businessline's research desk.


  • Ad free experience

    Experience cleaner site with zero ads and faster load times.


  • Personalised dashboard

    Customize your preference and get a personalized recommendation of stories based on your intrest.

Related

This article is closed for comments.
Please Email the Editor