HCL Tech shares decline after Q1 results disappoint Street

HCL Tech shares were under pressure on Thursday after the IT major's quarterly financial results fell short of analysts' estimates. After market hours on Wednesday, HCL Technologies reported an 11.3 per cent sequential fall in net profit to Rs 3,534 crore for the quarter ended June 2023.

HCL Tech shares were under pressure on Thursday. | Image: Reuters

HCL Technologies shares were under pressure on Thursday, a day after the IT major reported a set of quarterly earnings that fell short of analysts' expectations by a wide margin. The stock of Noida-based HCL Tech dropped by as much as Rs 22.3 or two per cent to Rs 1087.8 apiece on BSE.

HCL Tech Q1 results

After market hours on Wednesday, HCL Technologies — the country's third largest IT company by market value — reported a sequential fall of 11.3 per cent in net profit to Rs 3,534 crore for the quarter ended June 2023.

Its revenue contracted by 1.2 per cent to Rs 26,296 crore compared with the previous three months, according to a regulatory filing.

TRENDING NOW

According to Zee Business research, HCL Tech was estimated to report a quarterly net profit of Rs 3,860 crore and revenue of Rs 26,750 crore.

HCL Tech's margin — a key measure of profitability — came in at 16.9 per cent for the three-month period, a decline of 130 basis points sequentially. Zee Business analysts had pegged the company's margin at 18.3 per cent. Read more on HCL Tech Q1 results

EDITOR'S TAKE | Extremely weak performance

Zee Business Managing Editor Anil Singhvi said HCL Tech's quarterly performance was "extremely weak. The company maintained its guidance but it is difficult to believe."

He sess support for HCL Tech shares at Rs 1,065-1,080 levels. The stock offers an attractive dividend yield of five per cent near the Rs 1,000-1,050 range, he pointed out.

How brokerages view HCL Tech earnings

Brokerages held mixed views on HCL Tech after the company's earnings announcement. Macquarie maintained its 'óutperform' rating on HCL Tech with a target price of Rs 1,520, implying upside potential of 36.7 per cent from Wednesday's closing price.

Brokerage	Rating	Target price	Upside/downside (TP vs Wednesday's price)
Morgan Stanley	Overweight	Rs 1,260	13.5
JPMorgan	Underweight	Rs 900	-18.9
Jefferies	Hold	Reduced to Rs 1,205 from Rs 1,210	8.6
Citi	Neutral	Reduced to Rs 1,085 from Rs 1,135	-2.3
Nomura	Neutral	Reduced to Rs 1,090 from Rs 1,100	-1.8
HSBC	Buy	Raised to Rs 1,315 from Rs 1,330	18.5
Macquarie	Outperform	Rs 1,520	36.9

Catch latest stock market updates here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.

TAGS:

HCL Tech Nifty It