⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
HCLTECH - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | HCLTECH | Market Cap | 3,67,892 Cr. | Current Price | 1,356 ₹ | High / Low | 1,780 ₹ |
| Stock P/E | 30.0 | Book Value | 115 ₹ | Dividend Yield | 3.98 % | ROCE | 43.1 % |
| ROE | 32.6 % | Face Value | 2.00 ₹ | DMA 50 | 1,478 ₹ | DMA 200 | 1,558 ₹ |
| Chg in FII Hold | -0.43 % | Chg in DII Hold | 0.57 % | PAT Qtr | 3,682 Cr. | PAT Prev Qtr | 2,657 Cr. |
| RSI | 37.0 | MACD | -54.2 | Volume | 26,74,372 | Avg Vol 1Wk | 27,46,688 |
| Low price | 1,276 ₹ | High price | 1,780 ₹ | PEG Ratio | 7.46 | Debt to equity | 0.03 |
| 52w Index | 15.8 % | Qtr Profit Var | 4.42 % | EPS | 42.6 ₹ | Industry PE | 20.9 |
📊 Core Financials
- Quarterly PAT rose from ₹2,657 Cr. to ₹3,682 Cr. (≈38% growth).
- ROE: 32.6% and ROCE: 43.1% → strong profitability and efficient capital use.
- Debt-to-equity: 0.03 → virtually debt-free.
- Dividend Yield: 3.98% → consistent cash flow return to shareholders.
💹 Valuation Indicators
- P/E Ratio: 30.0 vs Industry PE 20.9 → premium valuation.
- P/B Ratio: 11.8 (Current Price ₹1,356 / Book Value ₹115) → expensive relative to assets.
- PEG Ratio: 7.46 → growth not keeping pace with valuation.
- Intrinsic Value: Current price above fair value zone, limited upside.
🏢 Business Model & Competitive Advantage
- Global IT services provider with diversified offerings in software, infrastructure, and digital transformation.
- Strong client base across industries ensures recurring revenue streams.
- Competitive edge: High ROCE/ROE, brand strength, and scale.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near ₹1,276–₹1,320 (close to 52-week low, RSI at 37 indicates oversold).
- Long-Term Holding: Suitable for dividend-seeking investors and those looking for steady growth, though valuations are stretched.
✅ Positive
- Strong profitability metrics (ROE, ROCE).
- Low debt ensures financial stability.
- Healthy dividend yield supports income investors.
⚠️ Limitation
- Valuation is expensive compared to peers.
- PEG ratio suggests growth is lagging behind price.
- FII holding decreased (-0.43%), showing reduced foreign investor confidence.
📉 Company Negative News
- Stock trading below 50 DMA (₹1,478) and 200 DMA (₹1,558), indicating bearish momentum.
- MACD at -54.2 signals weak technical trend.
📈 Company Positive News
- Quarterly profit jump of ~38% shows strong operational performance.
- DII holdings increased (+0.57%), reflecting domestic institutional confidence.
🌐 Industry
- IT services industry PE at 20.9, lower than HCLTECH’s 30.0, showing sector-wide undervaluation compared to HCLTECH.
- Industry growth driven by digital transformation, AI adoption, and cloud services.
🔎 Conclusion
- HCLTECH is fundamentally strong with excellent profitability and low debt.
- However, current valuations are stretched, making fresh entry less attractive at present levels.
- Best strategy: Accumulate near ₹1,276–₹1,320 and hold long-term for dividends and steady growth.