HCL Tech enters top-10 most valued firms club; surpasses ITC in m-cap


IT major HCL Technologies entered the list of top-10 most valuable companies in India after the inventory rose almost 4 per cent to Rs 817 on the BSE on Thursday.

At 10:36 pm, HCL Technologies recorded market capitalisation (m-cap) of Rs 2.2 trillion, and stood at 10th position in the overall ranking, BSE data show. The company surpassed cigarette major and fast moving consumer goods (FMCG) company ITC, which has the market-cap of Rs 2.19 trillion.

HCL Technologies now develop into the third IT company featuring in the top-10 most valuable firm when it comes to market-cap. Tata Consultancy Products and services (TCS) is on top of the list in IT space with Rs 9.32-trillion market-cap followed by Infosys, which has Rs 4.32 trillion-market-cap.

Shares of HCL Technologies hit a fresh record high of Rs 817.45 on the BSE on Thursday after the company and Google Cloud expanded partnership to deliver accelerated commerce intelligence platform.

Up to now four trading days, the inventory has rallied 13 per cent after the IT major raised its outlook for the September quarter in a mid-quarter update.

HCL Tech, on September 14, said it expects the revenue and the operating margin for the July-September quarter (Q2FY21) to be meaningfully better than the top end of the guidance it had given in July’2020. The inventory surpassed its preceding high of Rs 738.80, touched on September 8, 2020.

“We have seen strong execution all over the quarter to date, and continue to implement to the plan this month. The Revenue growth for the current quarter is expected to exceed 3.5 per cent quarter on quarter in fixed currency (CC), enabled by broad based momentum across all service lines, verticals and geographies,” HCL Technologies said.

The IT major further said the earnings before interest and tax (EBIT) margin for the current quarter is expected to be between 20.5 per cent and 21.0 per cent. Good booking momentum continues this quarter, led by life sciences & healthcare, telecom & media and financial services and products verticals. The pipeline continues to look healthy across service lines, verticals and geographies, it said.

Analysts at JP Morgan have ‘overweight’ rating on the inventory. While HCL was once a leading vendor for Gen 1 infrastructure management services and products contracts over 2007-14, it lagged peers on application services and products. “Its aggressive M&A-led build-out of its products and platforms commerce during the last four years diluted its focus on scale DX adoption and made it a laggard despite strong cloud roots,” the brokerage firm said.

Greater focus on digital transformation is returning, accompanied by success in large hybrid-cloud and DX adoption deals. This has resulted in HCLT’s biological growth accelerating back to an industry-leading of more than 15 per cent over the past past three quarters. While FY21 earnings growth is likely to be gentle because of Covid-19, the brokerage firm expects earnings growth to rebound sharply from FY22.

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