On Monday, Bernstein, a financial services group, adjusted the price target for HCL Technologies (HCLT:IN), increasing it to INR1,520 from INR1,460. The firm has maintained its Market Perform rating on the stock. This decision comes after HCL Technologies reported its quarterly financial performance.
The recent financial results showed that HCL Technologies experienced a revenue decrease of 1.6% quarter-over-quarter on a constant currency basis. In comparison to its peer, TCS, which saw a 2.2% rise in the same period, HCL's services revenue dropped by 1.9%. However, the company's Products & Platforms segment remained stable.
Despite the slight decline in quarterly revenue, HCL Technologies has kept its future revenue guidance unchanged, aiming for a 3-5% year-over-year growth on a constant currency basis by the financial year 2025. The company also maintained its forecast for EBIT margin, projecting it to be between 18% and 19%.
In terms of actual numbers, HCL Technologies reported overall revenue of $3,364 million, marking a 1.9% decrease quarter-over-quarter on a constant currency basis, but a 5.1% increase year-over-year. The EBIT margin was reported at 17.1%, a 50 basis points drop from the previous quarter, aligning with the consensus.
The Total Contract Value (TCV) of net new deals for the first quarter of the financial year 2025 was reported to be stable at $1.9 billion. This represents a 14% decrease from the previous quarter but shows a 25% increase on a year-over-year basis. The firm's stance on the stock remains at Market Perform following these results.
In other recent news, HCL Technologies reported first-quarter revenue for the fiscal year 2025 at $3,364 million, marking a 5.6% increase year-over-year but a 1.9% decrease quarter-over-quarter.
Despite these figures, the company's EBIT margin remained steady at 17.1%, aligning with consensus estimates. Additionally, HCL Technologies' management maintained its fiscal year 2025 revenue growth forecast of 3-5% year-over-year in constant currency and margin guidance of 18-19%.
In the realm of analyst ratings, UBS reiterated a Neutral rating on HCL Technologies with a price target of INR1,500, citing the company's first-quarter revenue dip and an EBIT margin that fell short on margin expectations.
Meanwhile, Morgan Stanley maintained its Overweight rating on the company and increased the price target to INR1,705, emphasizing the need for strong performance in the upcoming quarters to meet its projected growth.
On the other hand, CLSA downgraded HCL Technologies' shares from 'Outperform' to 'Hold' and slightly adjusted the price target to INR 1,556. This change is largely attributed to the offshoring of a significant contract in the Banking, Financial Services, and Insurance sector and the provision of productivity benefits to major clients in the first quarter.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.