HCL Tech surges 6% on 1:1 bonus, healthy Q2 numbers

Shares of HCL Technologies surged 6 per cent to Rs 1,160 on the BSE in the early morning deals on Thursday after the company announced 1:1 bonus issue and healthy set of numbers for the quarter ended September 30, 2019 (Q2FY20). The stock of the country’s third-largest information technology (IT) services firm was trading close to its all-time high price of Rs 1,190 recorded on April 30, 2019.

The board of directors of HCL Tech has recommended issue of one bonus share for every one equity share held by the equity shareholders of the company. The board also declared an interim dividend of 100 per cent or Rs 2 per equity share for the financial year 2019-20.

On a sequential basis, HCL Tech’s revenue for the quarter ended September 30, rose 6.7 per cent while net income rose 19.4 per cent to Rs 2,651 crore. It reported a 6 per cent rise in constant currency (CC) to Rs 17,528 crore. The company raised its full year revenue forecast to a growth of 15-17 per cent in CC, from a 14-16 per cent range earlier, thanks to its strong deal pipeline.

The management is confident on its growth outlook across business segments and expects IBM acquisition to achieve similar-to-better numbers on profitability. Additionally, it expects it to emerge as strong cross-sell engine in near term.

“Strong operating performance, upward revision in guidance, robust outlook and confident commentary reinforces our preferred pick view on the stock,” analysts at Dolat Capital said in a result update.

“Guidance revised up by 100bps to 15-17 per cent CC, more importantly organic component is expected to be about 10-11 per cent that implies HCL Tech would now be the growth leader in FY20; organically,” it added.

At 09:30 am, HCL Tech was up 3 per cent at Rs 1,127 on the BSE, as compared to a 0.49 per cent rise in the S&P BSE Sensex. The counter has seen huge trading volumes with a combined 1.8 million shares changing hands on the NSE and BSE.


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