Stock in HCL Technologies, the multi-national Indian tech giant, seem to be ramping up fairly quickly this month. The NYSE and Mumbai-listed stock is up 37% over the last six months. The stock had a good week last week, up nearly 9%.
The shares in Mumbai have been hitting a record high, and HCL stock was marked as a top gainer in India’s Nifty 50 on Monday. Following a small-ish slump in the share price in mid-2022, investors have been heavily rewarded in the last six months.
Who is HCL Technologies?
Founded in India, HCL offers software development, business process outsourcing, and infrastructure management services worldwide. It provides digital business services, which include application support and maintenance, digital application and platforms (of which more below), application modernisation and integration, data and analytics, software as a solution, and enterprise application.
HCL has a number of interesting proprietary technology platforms, like CloudSMART, an adaptive portfolio of solutions platform enabling continuous modernization, and cloud consulting for enterprises, and IoT WoRKS, which offers industry insights and benchmarking.
The company is effectively one of the more lucrative poster boys at the heart of the burgeoning Indian tech scene.
- Apple stock hits ATH but will 2025 see a correction?
- Our 2024 Market Predictions: How did we get on?
- Is Oracle stock about to lose its momentum?
Why is the HCL Technologies share price on the move?
Some pretty decent results have been moving HCL Technologies shares in Mumbai this morning, but the market had been expecting something spicy from the company all last week, with stock being bid up. HCL has not been making a secret of its optimism, with constant currency revenue guidance of 5-5.5% in fiscal 2024 published on Friday morning in India.
Indian large cap stocks, encapsulated by the benchmark Nifty 50 index, have been on a roar in early January. The index hit a record high today, along with India’s S&P BSE Sensex index. The IT sector has lit a fire under Indian large caps, with great Q3 numbers also coming out of Infosys, Wipro and TCS.
What were the last set of HCL numbers like?
HCL Technologies reported a strong all-round quarter: revenues and EBIT margin were well ahead of estimates. Total revenue numbers continue to look solid and justify the rise in the share price we were seeing all the way through the second half of last year.
The PE ratio still looks relatively cheap for a tech stock of this size at 22.09. The dividend yield is 3.37%.
Things to bear in mind
Not everyone is impressed with HCL: broker CLSA downgraded the stock to Underperform from Outperform recently, although interestingly they raised their share price target to 1536 rupees. CLSA’s big concern was that the average stock return over the past five years was fairly flat. CLSA says it is forecasting weak sequential growth for HCL in the next two quarters.
HCL Technologies is one of a number of very high quality Indian tech giants which I think will continue to make waves within the global technology sector. While it is well known with traders in India, overseas investors should be paying it more attention as well.
Regular readers will know I’m a big fan of both the tech sector and India this year, and HCL ticks both those boxes.
