Shares of HCL Technologies surged 4.75% on Monday morning to trade at a 52-week high value of Rs 849 per share.
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.
Shares of HCL Technologies surged 4.75% on Monday morning to trade at a 52-week high value of Rs 849 per share. With this the stock has now jumped 22% since the beginning of this month. The recent surge in the share price comes after the Information Technology (IT) giant informed the bourses on Monday morning that it intends to acquire DWS Limited, a leading Australian IT, business and management consulting group. HCL Technologies said that the total equity value pay-out will be $158.2 million in Australian Dollar, after considering a total number of shares at 131.83 million on a fully diluted basis.
“The DWS Group, with FY20 revenue at A$ 167.9 million, provides a wide range of IT services including Digital Transformation, Application development & support, Program & Project Management and Consulting,” HCL Technologies said in a release. The move is likely to strengthen HCL Technologies client portfolio in Australia and New Zealand across key industries. The transaction is still subject to the approvals of Australia’s Foreign Investment Review Board, Australian Competition Commission and New Zealand’s Overseas Investment Office. Shares of DWS on Australian Securities Exchange were trading higher by 30%.
“We are excited for this expansion of HCL Technologies in Australia and New Zealand and are confident that our combined strengths will further accelerate the digital transformation journeys of our clients and innovations for their end customers,” said Michael Horton, Executive Vice President & Country Manager, Australia & New Zealand, HCL Technologies. The IT major started operations in Australia two decades ago.
HCL Technologies shares have enjoyed a decent run on the stock exchanges in the recent weeks after the company said that it was expecting revenue growth for the July-September quarter to exceed 3.5% quarter on quarter in constant currency, enabled by broad based momentum across all service lines, verticals and geographies. It also said that the deal pipeline continued to remain healthy. HCL Technologies also sees EBIT% for the quarter to be between 20.5% and 21.0%.
Analysts at IT companies to be well placed to ride on the demand for digitisation across industries from around the globe. “We were already expecting a BFSI-led recovery for the sector starting Q2FY21,” said BOBCAPS in a recent report. Jyoti Roy – DVP- Equity Strategist, Angel Broking noted that the transaction could be completed by the end of this year, subject to closing conditions, including regulatory approvals. “HCL Tech remains our top pick in the large cap IT space and we have a buy rating on the company with a target price of Rs.946,” Jyoti Roy added.