What should investors do post HCL Tech Q2 results? Buy, sell or hold

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26 Aug, 2025 12:21

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Global brokerage firms such as Nomura and CLSA maintained their buy rating on HCL Technologies after India’s fourth largest IT company reported 5.7 percent QoQ rise in the second quarter (July-Sept) net profit to Rs 2,540 crore against Rs 2,403 crore in the quarter ended June 2018.

Its rupee revenue was up 7 percent at Rs 14,861 crore while dollar revenue increased 2 percent at USD 2,099 million.

Based on the target price mentioned by most brokerage firms, the stocks could rally by 14-50 percent in the next 12 months. CLSA has put out the most aggressive target price of Rs 1,500 which translates into an upside of 57 percent from Tuesday’s closing price of Rs 952.

On the other hand, Jefferies maintained a hold rating with a target price of Rs 1,090 which translates into an upside of 14 percent from current levels.

The company beat the analysts’ expectations polled by Reuters expected the company to post revenue of Rs 14,701.6 crore and profit of Rs 2,440.3 crore.

The constant currency (CC) revenue was up 3 percent, QoQ. The company has maintained FY 19 constant currency revenue growth guidance at 9.5-11.5 percent, while EBIT margin to grow at 19.5-20.5 percent.

Here’s what brokerage firms are recommending:

CLSA: Buy| Target price Rs 1,500

CLSA maintained a buy rating on HCL Technologies with a target price of Rs 1,500. The revenues were largely in-line with estimates. Organic growth momentum is seen recovering in the second half.

The global investment bank maintains a buy call based on the return of organic growth, IP value and an undemanding valuation.

Nomura: Buy| Target: Rs 1,265

Nomura maintained its buy rating on HCL Technologies post Q2 results with a target of Rs 1,265. IMS growth improvement with ex-India growth of 3.2 percent sequentially on a QoQ basis is key for a positive outlook on the stock.

The company remains the top pick and only buy with respect to India IT services. The valuations are attractive for Dollar Rev/EPS CAGR of 8%/12% for FY18-21.

Jefferies: Hold: Target: Rs 1,090

Jefferies marinated its hold rating on HCL Technologies post Q2 results but slashed its target price to Rs 1,090 from Rs 1,120 earlier.

Renewals in the infrastructural services will be an overhang in FY20, but less than what we could witness in FY19. Tailwind from rupee fall and productivity improvement largely offset by wage hike, it said.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.