HCLTech's U.S. operations appear well-positioned to mitigate risks from potential changes in U.S. visa regulations following Donald Trump's return to the White House, with approximately 80 percent of HCLTech's U.S.-based employees being non-visa dependent, according to Morgan Stanley. HCLTech has significantly expanded its nearshore centres to further reduce exposure to visa-related challenges.
Concerns over U.S. immigration policies have resurfaced under the Trump 2.0 administration, which is expected to tighten scrutiny on H-1B visas—critical for IT exports. The H-1B program allows U.S. companies to employ foreign workers in specialised roles.
At 10.25 AM, shares of HCLTech traded 2 percent higher at Rs 1,873. HCLTech shares have gained 25 percent year-to-date, significantly outperforming the Nifty 50's 8 percent rise during the same timeframe. The stock has risen 5 percent in November so far.
Morgan Stanley maintained an 'Equal-weight' rating on HCLTech with a target price of Rs 1,970, reflecting an upside of over 5 percent from the stock's current market price.
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Morgan Stanley noted that HCLTech's management provided balanced commentary on demand trends. The brokerage said that the company's qualified deal pipeline is at an all-time high, with the order book remaining robust despite consistent deal wins. HCLTech remains focused on delivering profitable growth and is unfazed by pricing competition in large deals.
In Q2FY25, HCLTech reported total contract value (TCV) of $2,218 million in new deal wins.
The company’s better-than-expected Q2FY25 earnings prompted several brokerages, including Nuvama Institutional Equities, Centrum Broking, Antique Stock Broking, and Investec, to raise their target prices on the stock.
HCLTech reported a consolidated net profit of Rs 4,235 crore for the quarter ended September, reflecting a 0.5 percent decline QoQ. This figure exceeded Moneycontrol's estimate of a 5.5 percent QoQ decline to Rs 4,024 crore. Meanwhile, revenue from operations increased by nearly 3 percent QoQ to Rs 28,862 crore, surpassing Moneycontrol's forecast of 1.6 percent QoQ growth to Rs 28,517 crore.
HCLTech also raised its revenue growth guidance for FY25, now expecting growth in the range of 3.5-5 percent, up from the previous 3-5 percent range.
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