HCL Technologies share price falls over 4% post Q2 result; stock plunges 10% in two days

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October 16, 2020 10:41 AM

During the July-September quarter, HCL Tech signed 15 transformational deals. The IT company has increased the FY21 EBIT margin guidance to 20-21%

HCL Tech,HCL Tech hit a fresh 52-week high of Rs 910.75 apiece in Wednesday's session, since then the stock has tumbled over 10 per cent.

HCL Technologies share price fell 4.4 per cent to Rs 821 apiece on BSE after the IT company announced July-September quarter results. HCL Tech Q2 net profit came at Rs 3,142 crore in July-September quarter, rising 18.5 per cent. The company had posted a net profit of Rs 2,651 crore in the corresponding period of the last year. While, sequentially, net profit rose 7.4 per cent. The revenue of the company stood at Rs 18,594 crore. The company has also declared an interim dividend of Rs 4 per equity share of Rs 2 each for FY21. “HCL Tech result is on the expected line. But the current tech rally has discounted a major chunk of the IT results,” Vishal Wagh, Head of Research, Bonanza Portfolio Ltd, told Financial Express Online. 

This is the key reason due to which stocks are correcting post declaration of results. “Going forward, Hcl Tech will find support at 780 level and resistance will be just near to 900 levels. The stock is likely to see consolidation in this range,” Wagh added.

HCL Tech hit a fresh 52-week high of Rs 910.75 apiece in Wednesday’s session, since then the stock has tumbled over 10 per cent. During the July-September quarter, HCL Tech signed 15 transformational deals. The IT company has increased the FY21 EBIT margin guidance to 20-21% from 19.5-20.5%. From the March lows of Rs 375.50, HCL Technologies shares have rallied 118.64 per cent.

The dollar revenue growth stood at 6.4 per cent at 2,507 million and the company posted constant currency revenue growth of 4.5 per cent. The earnings before interest and tax (EBIT) margin was at 21.6 per cent, which is a 5-year high. The Record date of October 24, 2020, has been fixed for the payment of the interim dividend. The payment date of the said interim dividend shall be November 9, 2020.

“We have delivered a stellar Q2 performance with sequential revenue growth of 4.5 per cent in constant currency and 21.6 per cent EBIT margin,” HCL Technologies President and CEO C Vijayakumar said. He added saying that this growth momentum was driven by continued leadership in Digital Transformation and Cloud businesses and strong stability in the Products and Platforms segment, all of which continue to open diverse growth avenues for the company.

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