HCL Tech shares hit 52-week low post Q1 earnings; time to buy, sell or hold?

Shares of HCL Technologies fell to a fresh 52-week low today after the IT firm reported a marginal rise in its consolidated net profit for the quarter ended 30 June, 2022. The IT firm logged a 2.43 cent year-on-year rise in its consolidated net profit at Rs 3,283 crore for the quarter ended 30 June, 2022 against a net profit of Rs 3,205 crore in the year-ago period.

HCL Technologies stock touched a low of Rs 905.2, down 2.46 per cent on BSE. The stock opened at Rs 925.10.

The share is trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages. HCL Technologies stock has lost 5.89 per cent in one year and fallen 30.81 per cent since the beginning of this year.

In a month, the stock has lost 8 per cent. Total 1.47 lakh shares of the firm changed hands amounting to a turnover of Rs 13.36 crore on BSE. The market cap of the firm fell to Rs 2.47 lakh crore.

HCL Tech Q1 results: Consolidated PAT rises marginally YoY to Rs 3,283 cr, interim dividend declared

Sequentially, the company's net profit declined 8.6 per cent in Q1FY23 from Rs 3,593 crore in the March quarter (Q4FY22).

Revenue from operations rose 16.9 per cent YoY to Rs 23,464 crore for the first quarter of 2022-2023 as against Rs 20,068 crore in the same quarter last fiscal.

Stocks in news: HCL Tech, Delta Corp, Axis Bank, Anand Rathi Wealth and more The board of HCL Tech has declared an interim dividend of Rs 10 per equity share of Rs 2 each for the financial year 2022-2023.

Here's a look at what brokerages said post the IT company's Q1 earnings.

Motilal Oswal has maintained its buy call on the stock with reduced target price of Rs 1,100 (an upside of 19 per cent) against the current market price of Rs 928.

"While we were disappointed by the weak growth in the IT services business, adverse seasonality (productivity pass-through), and high base (three straight quarters of strong delivery) indicate limited future read-through. Moreover, the continued strong deal TCV (Services book-to-bill ratio of 0.8x) and pipeline commentary should help them improve growth in 2QFY23. We expect HCLT's Services business to do well in a favorable demand environment for Cloud migration and R&D outsourcing. We tweak down our FY23/FY24 estimate by 1%/3%. We maintain our Buy rating with a target price of Rs 1,110/share (19x FY24E EPS)," the financial services firm said.

Morgan Stanley has given a target price of Rs 1,300 for HCL Tech stock. Revenue beat in Q1 was more than offset by margin miss and expectations of FY23 margins toward the lower end of the band, the brokerage said. "Even that requires sharp execution, so there could be downside risks. We see consensus F23/F24 margins coming down, driving EPS cuts," it added.

Nomura has a neutral stance on the HCL Tech stock and pared its target price to Rs 1,000 post Q1 earnings. Margins were a miss and deal wins were adversely affected in 1Q FY23, the brokerage said adding the company is likely to miss its margin guidance in FY23F. On the positive side, Nomura said deal wins were healthy and FY23F revenue guidance has lower risks. However, it lowered FY23-24F earnings per share by 7-9 per cent.