Shares of HCL Technologies (HCLTech) surged up to 5% in early trading on Monday following its optimistic outlook, with the company projecting growth across most verticals and geographies in the upcoming quarter. HCLTech, based in Noida, reported a 6.7% increase in first-quarter revenue last Friday, prompting at least 18 analysts to raise their target price for the company. The median price target rose to 1,560 rupees from 1,506.50 rupees a month earlier.
Since reporting its last quarter’s results in April, HCLTech shares have gained about 9%, contributing to a 10% increase year-to-date, slightly below the 10.4% gains in the broader IT index. Analysts are optimistic about future prospects, anticipating a return in discretionary client spending later this year, particularly in the United States, a key market for Indian IT services firms.
Centrum Broking analysts foresee gradual revenue growth driven by recent contract expansions and increasing adoption of AI-driven solutions. HCLTech anticipates sequential growth in all verticals and markets, except for financial services, where a specific deal impact is expected. The company is optimistic about future deal bookings over the next few quarters.
Management commentary from HCLTech highlighted stability in high-tech services and the potential for a ramp-up in financial services activities in the second half of the year, according to Morgan Stanley analysts. Tata Consultancy Services (TCS), which reported last week, also indicated early signs of recovery in the IT sector despite ongoing demand challenges. Infosys, another major player, is set to announce its quarterly results later this week.
Currently, HCLTech is trading at a price-to-earnings ratio of 26.5x over the last 12 months, trailing behind TCS at 32.5x and Infosys at 27.04x.
 surged up to 5% in early trading on Monday following its optimistic outlook, with the company projecting growth across most verticals and geographies in the upcoming quarter. HCLTech, based in Noida, reported a 6.7% increase in first-quarter revenue last Friday, prompting at least 18 analysts to raise their target price for the company. The median price target rose to 1,560 rupees from 1,506.50 rupees a month earlier...){kind=link}