HCLTech Shares Jump 5% To Record After Q3 Profit Beats Estimates
The stock's target price was raised by Citi Research and Nomura Holdings Inc., citing revenue growth and margin-expansion outlook.
Shares of HCL Technologies Ltd. jumped over 5% to a record high on Monday after its third-quarter profit beat analysts' estimates.
The company's net profit rose 13.51% year-on-year to Rs 5,874 crore in the quarter ended December, according to an exchange filing.
HCLTech Q3 FY24 Highlights (Consolidated, QoQ)
Revenue up 6.65% at Rs 28,446 crore (Bloomberg estimate: Rs 28,075.1 crore).
EBIT up 14.7% at Rs 5,644 crore (Bloomberg estimate: Rs 5,256.9 crore).
EBIT margin at 19.84% (Bloomberg estimate: 18.7%).
Net profit up 13.51% at Rs 5,874 crore (Bloomberg estimate: Rs 4,124.4 crore).
Adding to this, brokerages Citi Research and Nomura Holdings Inc. raised their target prices on the stock, citing revenue growth and margin-expansion outlook.
Citi raised the price to Rs 1,570 apiece from Rs 1,475 earlier, implying a potential downside of 0.96%. Nomura raised the price to Rs 1,500 apiece from the previous Rs 1,420, implying a potential downside of 5.3%.
"We believe HCLTech is well-placed for encouraging growth from a long-term perspective, given its multiple long-term contracts with the world's leading brands," Axis Securities said in a report. "Richer revenue visibility gives us confidence in its business growth moving forward."
However, rising concerns over business uncertainties in large economies and continuing supply-side constraints are creating challenges for the company’s growth prospects, it said.
HCLTech's stock rose as much as 5.11% during the day to Rs 1,619.60 apiece on the NSE. It was trading 2.55% higher at Rs 1,580.15 per share, compared to a 0.7% advance in the benchmark Nifty 50 as of 11:16 a.m.
The share price has risen 47% in the last 12 months. The total traded volume so far in the day stood at 6.3 times its 30-day average. The relative strength index was at 74.25, indicating that the stock maybe overbought.
Nineteen out of 42 analysts tracking the company have a 'buy' rating on the stock, 15 recommend a 'hold' and eight suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 1.1%.
