Shares of HCL Technologies erased early morning gains on Friday and traded 2% lower even after the IT major registered 31% YoY rise in net profit at Rs 3,982 crore for the December 2020 quarter. The IT major had registered a net profit of Rs 3,037 crore in the October-December 2019 quarter. On a sequential basis, HCL's profit grew 26.7%.
In terms of revenue, the IT service provider registered a 6.4% YoY rise in the quarter under review to Rs 19,302 crore from Rs 18,135 crore in the corresponding quarter last year. Consolidated revenue was up by 3.8% QoQ.
HCL Tech stock opened with a gain of Rs 1,046 and later touched an intraday high of Rs 1,052, rising 2.36% on BSE against the last closing of Rs 1,027.75. Although later, the stock erased early gains and fell 2.37% to an intraday low of Rs 1,003.35.
HCL Tech share price is trading higher than 20, 50, 100 and 200-day moving averages but lower than 5-day moving averages. Meanwhile, IT index was trading 0.86% lower on BSE, with Sensex falling 1.2%. HCL Tech has fallen 4.78% in the last 3 days.
Stock price of HCL Tech has risen 1% in one week, 14% in one month, 7% year-to-date.
Market capitalisation of HCL Tech stood at Rs 44,347.18 crore today. The stock has hit a 52 week high of Rs 1,073.55 and a 52-week low of Rs 375.50. Share of the IT major, with Rs 2 face value has risen 70% in one year.
While EBIT margins were up by 130bps QoQ to 22.9%, its Gross margins expanded by 80bps QoQ to 42.0%. Consolidated operating profit for the quarter was up by 9.9% QoQ.
Company's board has declared an interim dividend of Rs 4 per equity share for the financial year 2020-21.
"We posted a strong financial performance in Q3 FY''21 with a constant currency revenue growth of 3.5 per cent sequentially and 1.1 per cent year-on-year and an EBIT of 22.9 per cent. This solid performance was driven by robust momentum in our Mode 2 and Mode 3 businesses led by Digital, Cloud and Products & Platform segments," HCL Technologies President and CEO C Vijayakumar said.
Commenting on the results posted today, Jyoti Roy - DVP- Equity Strategist, Angel Broking said, "HCL Tech's management has increased their guidance for Q4FY21 to 2.0-3.0% growth in revenue in constant currency terms. While the Q1FY21 numbers were marginally ahead of our estimates in terms of revenue growth the expansion in margins despite wage hikes during the quarter was a pleasant surprise. We continue to remain positive on HCL Technologies and have a target price of Rs 1,180 on the stock."