HCL Technologies’ fundamental analysis highlights key financial metrics including market capitalization of ₹4,30,184 crore, PE ratio of 26.2, debt-to-equity ratio of 0.08, and return on equity of 23.3% These figures reflect the company’s financial health and current market valuation.
Content:
- HCL Technologies Ltd Overview
- HCL Technologies Financial Results
- HCL Technologies Financial Analysis
- HCL Technologies Company Metrics
- HCL Technologies Stock Performance
- HCL Technologies Peer Comparison
- HCL Technologies Shareholding Pattern
- HCL Technologies History
- How To Invest In HCL Technologies Ltd Share?
- HCL Technologies Limited Fundamental Analysis – FAQs
HCL Technologies Ltd Overview
HCL Technologies Ltd is a global IT services and consulting company headquartered in India. It specializes in software development, infrastructure management, and digital transformation. With a strong presence worldwide, HCL delivers innovative technology solutions to various industries.
The company has a market capitalization of ₹4,30,184 crore and is listed on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Currently, the stock is trading 6.60% below its 52-week high and 39.1% above its 52-week low.
HCL Technologies Financial Results
HCL Technologies Ltd reported robust financial performance for FY 24, with sales reaching ₹1,09,913 crores and a net profit of ₹15,710 crores. The company showcased strong revenue growth and maintained a solid dividend payout ratio, reflecting its financial health.
Revenue Trend: HCL Technologies saw a steady revenue increase over the years. FY 24 revenues surged to ₹1,09,913 crores from ₹85,651 crores in FY 22, marking consistent growth driven by strong demand and effective market strategies.
Equity and Liabilities: Equity and liabilities data reveal a stable financial structure, with increased sales and profitability supporting a solid equity base. Liabilities are managed prudently, ensuring financial stability while supporting operational and strategic investments.
Profitability: The company’s profitability remains strong, with operating profit rising to ₹24,198 crores in FY 24. The Operating Profit Margin (OPM) held steady at 22%, reflecting efficient cost management and sustained operational performance.
Earnings Per Share (EPS): HCL Technologies’ EPS improved to ₹57.99 in FY 24, up from ₹49.77 in FY 22. This growth highlights the company’s ability to deliver increasing shareholder value and reflects positively on its financial performance.
Return on Net Worth (RoNW): The RoNW is robust, underscoring the efficient use of shareholders’ equity to generate profits. The net profit increase, coupled with stable equity, supports a strong return, benefiting investors and reflecting effective management.
Financial Position: HCL Technologies maintains a strong financial position with a solid balance sheet, increasing revenues, and profitability. The high dividend payout ratio of 89.67% underscores confidence in sustained financial health and shareholder value.
HCL Technologies Financial Analysis
| FY 24 | FY 23 | FY 22 | |
| Sales | 1,09,913 | 1,01,456 | 85,651 |
| Expenses | 85,715 | 78,828 | 65,121 |
| Operating Profit | 24,198 | 22,628 | 20,530 |
| OPM % | 22 | 22 | 24 |
| Other Income | 1,495 | 1,358 | 1,067 |
| EBITDA | 25,693 | 23,986 | 21,597 |
| Interest | 553 | 353 | 319 |
| Depreciation | 4,173 | 4,145 | 4,326 |
| Profit Before Tax | 20,967 | 19,488 | 16,952 |
| Tax % | 25.07 | 23.82 | 20.22 |
| Net Profit | 15,710 | 14,845 | 13,523 |
| EPS | 57.99 | 54.85 | 49.77 |
| Dividend Payout % | 89.67 | 87.51 | 84.39 |
*All values in ₹ Crores
HCL Technologies Company Metrics
HCL Technologies Ltd, with a market capitalization of ₹4,30,184 crores, trades at ₹1,585 per share. The company’s financial metrics reflect strong performance, including impressive returns and a solid dividend yield, highlighting its investment appeal and market position.
Market Cap: HCL Technologies boasts a market capitalization of ₹4,30,184 crores, indicating its significant market presence and valuation.
Book Value: The book value of HCL Technologies is ₹252 per share. This metric represents the company’s net asset value, providing investors insight into the intrinsic value of the stock relative to its market price.
Face Value: HCL Technologies has a face value of ₹2.00 per share. This nominal value is used for accounting purposes and is significantly lower than the current market price, highlighting the stock’s appreciation over time.
Turnover: The asset turnover ratio of 1.14 indicates HCL Technologies’ efficiency in using its assets to generate revenue. This ratio reflects effective management of resources and contributes to the company’s strong financial performance.
PE Ratio: With a price-to-earnings (P/E) ratio of 26.2, HCL Technologies’ stock is valued at a premium relative to its earnings. PE ratio suggests growth expectations among investors, reflecting confidence in the company’s future profitability.
Debt: HCL Technologies maintains a low debt level of ₹5,758 crores, demonstrating prudent financial management. The low debt-to-equity ratio of 0.08 indicates minimal reliance on borrowed funds, supporting financial stability.
ROE: The return on equity (ROE) stands at 23.3%, showcasing HCL Technologies’ effective use of shareholders’ equity to generate profits. This high ROE reflects strong financial performance and effective management strategies.
EBITDA Margin: The EBITDA margin of 22.0% highlights HCL Technologies’ strong operational efficiency and profitability. This margin indicates a significant portion of revenue is converted into earnings before interest, taxes, depreciation, and amortization.
Dividend Yield: HCL Technologies offers a dividend yield of 3.28%, providing attractive returns to shareholders.
HCL Technologies Stock Performance
The table shows HCL Technologies’ strong investment returns: 24% over 5 years, 12% over 3 years, and a notable 35% over 1 year. These figures indicate robust performance and substantial returns for investors in both short and long-term horizons.
| Period | Return on Investment (%) |
| 5 Years | 24% |
| 3 Years | 12% |
| 1 Year | 35% |
Example
For instance, if an investor, A, invested ₹1,00,000 five years ago, they would have realized a 24% return, resulting in ₹1,24,000 at the end of the period.
Similarly, a ₹1,00,000 investment made three years ago would have grown to ₹1,12,000, reflecting a 12% return.
Most recently, a ₹1,00,000 investment over the past year would have appreciated to ₹1,35,000, showcasing a 35% return.
HCL Technologies Peer Comparison
HCL Technologies, with a market cap of ₹441,282.65 Crores, stands strong with notable 1-year returns and solid growth. Its PEG ratio reflects growth potential, though it lags behind Persistent Systems and Infosys in return percentages.
| S.No. | Name | CMP Rs. | Mar Cap Rs.Cr. | PEG | 3mth return % | 1Yr return % |
| 1 | TCS | 4295.25 | 1554781.43 | 3.98 | 10.11 | 24.51 |
| 2 | Infosys | 1823.25 | 757292.45 | 2.53 | 25.45 | 30.83 |
| 3 | HCL Technologies | 1626.15 | 441282.65 | 2.9 | 20.62 | 38.87 |
| 4 | Wipro | 495.15 | 259039.75 | 5.97 | 6.61 | 19.27 |
| 5 | LTIMindtree | 5427.55 | 160673.35 | 1.42 | 13.76 | 4.51 |
| 6 | Tech Mahindra | 1524.4 | 149149.59 | -5.27 | 16.55 | 24.98 |
| 7 | Persistent Sys | 4764.1 | 73404.98 | 2.33 | 35.02 | 92.95 |
HCL Technologies Shareholding Pattern
The shareholding pattern of HCL Technologies for June 2024 shows a stable distribution of ownership. Promoters hold 60.81%, consistent with the previous year. Foreign Institutional Investors (FII) and Domestic Institutional Investors (DII) have slightly increased their stakes, while retail and others have decreased marginally.
| Jun 2024 | Mar 2024 | Dec 2023 | Sept 2023 | |
| Promoters | 60.81 | 60.81 | 60.81 | 60.81 |
| FII | 18.45 | 19.65 | 19.42 | 18.8 |
| DII | 15.8 | 14.98 | 15.15 | 15.65 |
| Retail & others | 4.92 | 4.55 | 4.6 | 4.74 |
*All values in %
HCL Technologies History
HCL Technologies was incorporated in November 1991 as HCL Overseas Limited and renamed HCL Technologies Limited in 1999 to better reflect its focus on technology. By the mid-1990s, it formed a joint venture with Perot Systems and expanded its software infrastructure.
In the 2000s, HCL Technologies set up major offshore development centres and strategic partnerships with global firms like IBM and NEC. It also ventured into new markets and acquired several companies, including British BPO firm Axon in 2008.
Recent years have seen HCL Technologies strengthen its global presence through acquisitions, such as the German automotive engineering firm ASAP Group, and strategic partnerships with giants like Google Cloud, marking its continued growth and innovation.
How To Invest In HCL Technologies Ltd Share?
Investing in HCL Technologies Ltd shares is a straightforward process:
- Open a Demat Account: Start by opening a Demat and trading account with a reliable brokerage firm like Alice Blue.
- Complete KYC: Submit necessary documents for KYC verification.
- Fund Your Account: Deposit funds into your trading account.
- Buy Shares: Search for HCL Technologies Ltd shares and place your buy order.
HCL Technologies Limited Fundamental Analysis – FAQs
HCL Technologies’ fundamental analysis reveals key metrics: a market capitalization of ₹4,30,184 crore, a PE ratio of 26.2, a debt-to-equity ratio of 0.08, and a return on equity of 23.3%, indicating its financial health and market valuation.
The market cap of HCL Technologies Ltd as of August 12, 2024, is approximately ₹4,30,184 crore. This value reflects the company’s strong market position in the Indian IT industry.
HCL Technologies Limited is a global IT services and consulting company based in India. It provides a range of services including software development, IT infrastructure management, and business process outsourcing, serving various industries worldwide.
HCL Technologies is publicly traded, so it is owned by numerous shareholders. However, it was founded by Shiv Nadar, who has been a major shareholder and influential figure in the company. Ownership is widely distributed among institutional and retail investors.
The main shareholders of HCL Technologies include institutional investors like LIC, ICICI Bank, and various mutual funds. Prominent individual stakeholders often include the founders and key executives. For updated details, check the latest shareholder reports or filings.
HCL Technologies operates in the information technology (IT) and services industry, specializing in software development, IT consulting, and business process outsourcing. It offers technology solutions and services to various sectors, including finance, healthcare, and manufacturing.
To invest in HCL Technologies Ltd shares, open a brokerage account, research the company’s financials, and track its stock performance. Purchase shares through your brokerage platform, either via market or limit orders, based on your investment strategy.
Determining if HCL Technologies is overvalued or undervalued requires a comprehensive analysis of its financials, growth prospects, industry trends, and market conditions. Investors should consider metrics like the P/E ratio and PEG ratio, and compare them with industry peers and historical values for a balanced assessment.
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Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.
