HCLTECH - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | HCLTECH | Market Cap | 3,25,396 Cr. | Current Price | 1,199 ₹ | High / Low | 1,780 ₹ |
| Stock P/E | 26.1 | Book Value | 95.4 ₹ | Dividend Yield | 4.50 % | ROCE | 53.9 % |
| ROE | 41.0 % | Face Value | 2.00 ₹ | DMA 50 | 1,389 ₹ | DMA 200 | 1,510 ₹ |
| Chg in FII Hold | -0.70 % | Chg in DII Hold | 0.58 % | PAT Qtr | 4,833 Cr. | PAT Prev Qtr | 3,682 Cr. |
| RSI | 28.6 | MACD | -53.2 | Volume | 53,12,743 | Avg Vol 1Wk | 59,30,119 |
| Low price | 1,184 ₹ | High price | 1,780 ₹ | PEG Ratio | 7.45 | Debt to equity | 0.04 |
| 52w Index | 2.53 % | Qtr Profit Var | 58.7 % | EPS | 28.1 ₹ | Industry PE | 21.6 |
Positive
- Exceptional ROE (41%) and ROCE (53.9%) highlight strong capital efficiency.
- Dividend yield of 4.5% ensures steady shareholder returns.
- Debt-to-equity ratio of 0.04 reflects a very healthy balance sheet.
- Quarterly PAT growth of 58.7% demonstrates strong earnings momentum.
- EPS of ₹28.1 supports consistent profitability.
Limitation
- PEG ratio of 7.45 signals overvaluation relative to growth.
- Current price (₹1,199) trading below 50 DMA (₹1,389) and 200 DMA (₹1,510), showing bearish technical sentiment.
- RSI at 28.6 indicates oversold conditions, but also weak momentum.
- P/E ratio (26.1) above industry average (21.6), limiting valuation attractiveness.
Company Negative News
- Decline in FII holdings (-0.70%) suggests reduced foreign investor confidence.
- IT sector weakness continues to weigh on sentiment.
Company Positive News
- Quarterly profit surged to ₹4,833 Cr. from ₹3,682 Cr.
- DII holdings increased (+0.58%), showing domestic institutional support.
- Consistent dividend payouts strengthen investor trust.
Industry
- IT sector facing global demand slowdown, impacting valuations.
- Industry P/E at 21.6 reflects sector-wide moderation.
- HCLTECH’s diversified service portfolio and strong client base provide resilience.
Conclusion
HCLTECH’s fundamentals remain robust with strong efficiency, dividend yield, and earnings growth. However, valuation metrics (P/E, PEG) and weak technical indicators suggest caution.
Entry Zone: Attractive accumulation range between ₹1,150–₹1,200 for long-term investors.
Long-Term Guidance: Suitable for dividend-focused investors and those seeking capital efficiency, but expect moderate returns until IT sector sentiment improves.
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