HCL Technologies Ltd. share price target

HCL Technologies (HCLT) reported weak 4QFY24 performance with 0.3%
QoQ CC consolidated revenue growth, below our estimate of 0.9% QoQ CC.
The weak performance was due to the seasonality in HCL Software (-18.5%
QoQ CC) coupled with weakness in ERS (1.6% QoQ CC), while ITBS posted an
impressive 4% QoQ growth in CC

Recommendation: 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.

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).