HCLTech shares slip 5% after weak Q4 results; brokerages cut targets

HCLTech share price today, HCLTech Q4 results: HCLTech shares on Monday, April 29 slipped over five per cent in early morning deals to the day’s low of Rs 1,399.05 on NSE after global brokerages trimmed the targets on the IT stock following weak Q4 earnings report, falling short of analysts’ expectations.  

HCLTech Q4 results 

Noida-headquartered HCLTech on Friday post market hours posted a consolidated net profit of Rs 3,986 crore for the quarter ended March 31, marking a decline of 8.4 per cent compared with the previous three months and falling short of analysts’ expectations. 

The IT firm, the country’s third largest IT company by market value, registered 0.2 per cent sequential growth in revenue to Rs 28,499 crore for the January-March period, according to a regulatory filing. 

Its quarterly revenue inched up 0.4 per cent to $3,430 million in dollar terms, while revenue in constant currency expanded 0.3 per cent. 

According to Zee Business research, HCLTech’s fourth-quarter net profit was estimated at Rs 4,220 crore and revenue at Rs 28,650 crore or $3,450 million. The analysts had expected constant currency revenue growth at 0.6 per cent. Read more on HCLTech Q4 results 

Management Commentary

“HCLTech continues to lead the industry in FY24 with good dollar revenue growth of 5.4 per cent YoY during challenging times through our strong commitment to our clients and our people,” said C Vijayakumar, CEO and MD, HCLTech. 

“As we look ahead, global enterprise technology spend will only grow with adoption of AI. We are well positioned to capitalize with our AI led propositions, Global delivery model and ideal mix of technology services and products,” Vijayakumar added. 

HCLTech dividend

HCLTech declared a dividend of Rs 18 per share with a record date of May 7. Read more on HCLTech dividend

HCLTech share price target: Brokerages trim targets

Jefferies has maintained a hold call on HCL Tech with a reduced target price of Rs 1,390 from Rs 1,500 earlier. Morgan Stanley has maintained an overweight rating on the counter with a trimmed target price of Rs 1,650 from Rs 1,730 earlier. 

In addition, brokerage firms—JPMorgan, Goldman Sachs, Citi and Nomura—each have retained a neutral call on the IT stock with trimmed targets. JPMorgan has reduced the target price to Rs 1,470 from Rs 1,480, Goldman Sachs has trimmed the target by Rs 70 to Rs 1,370 per equity share, Citi has slashed the target to 1,520 from Rs 1,615 while Nomura has cut the target by Rs 100 to Rs 1,400.

• Calling Q4 a mixed bag, Nomura highlighted the following key points in its note: 
• FY25F guidance weaker than expected.
• Net new deal wins at $2.29 billion were up 10 per cent year-on-year (YoY)
• EBIT margin of 17.6 per cent (-210bp quarter-on-quarter (QoQ), -50bp YoY) was below consensus
• Lower FY25-26F EPS by 5 per cent

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