HCL Technologies Ltd. share price target

HCL tech USD revenue for Q2FY24 stood at USD 3,225 Mn., registering a growth of 4.64% YoY and 0.78% sequentially. The growth was primarily driven by the Services segment (4.6% YoY CC) and Software segment (3.6% YoY CC).

HCLT has reported weaker-than-expected revenue growth of 1% QoQ CC (vs I-SEC estimate of 1.9%) in Q2FY24 due to weakness in products and platform business (-4% QoQ CC). Revenue growth revived in services business with 0.9% QoQ growth in IT services and 5% (1.6% organic) QoQ CC growth in ER&D vs a decline in Q1FY24 (exhibit 4).

Global uncertainties leading to delayed spending decisions pose a challenging environment to HCL Tech and will impact its performance in the near term. Moreover, supply-side constraints will take some more time to ease off. Hence, we recommend a HOLD rating on the stock.

During the quarter, HCL tech reported revenue growth of 12.07% on a YoY basis to INR 2,62,960 mn and decline by 1.17% on a sequential basis from INR 2,66,060 mn. USD revenue stood at $3200 mn in Q1FY24, registering a growth of 5.79% on a YoY basis and decline by 1.17% on a QoQ basis from $ 3235 mn.