In a recent analysis by KR Choksey, HCL Technologies exhibited a strong performance in Q2FY24, with an 8.05% year-on-year (YoY) growth in revenue, reaching INR 2,66,720 mn. This also marked a sequential increase of 1.43%. The Earnings Before Interest and Taxes (EBIT) stood at INR 49,340 mn, representing a YoY growth of 11.45% and a sequential growth of 10.63%.
The operating margin showed significant improvement as well, increasing by 154 basis points quarter-on-quarter (QoQ) and 57 basis points YoY to reach 18.50%. In addition to this, the net profit rose to INR 38,330 mn, showing a growth of 9.92% YoY and an 8.55% increase sequentially. The Profit After Tax (PAT) margin expanded to 14.37%.
Earnings per share (EPS) for HCL Technologies was reported at INR 14.13, up from INR 12.88 YoY and INR 13.03 QoQ. HCL Technologies is currently trading at a Price-to-Earnings (P/E) multiple of 17.5.
In light of these results, the company revised its target price from INR 1,206 to INR 1,374 with a P/E multiple of 19x to the FY25 estimated EPS of INR 72.3. This revision has earned HCL Technologies an "ACCUMULATE" rating and suggests an upside potential of 8.3% over the current market price.
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