HCLTECH - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.3

📊 Core Financials Breakdown

Profitability

ROE: 32.6% and ROCE: 43.1% — outstanding returns, reflecting superior capital efficiency and operational strength.

EPS: ₹46.7 — robust earnings base, with PAT at ₹2,888 Cr despite a slight dip from the previous quarter.

Dividend Yield: 3.61% — generous and consistent, appealing for long-term income investors.

Balance Sheet & Leverage

Debt-to-Equity: 0.03 — virtually debt-free, enhancing resilience and flexibility.

Book Value: ₹129 — implies a P/B ratio of ~11.6, high but justified by premium profitability and brand strength.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 32.0 Slightly above industry average (30.0) — fair for a top-tier IT firm

PEG Ratio 7.96 Elevated — suggests growth may be overpriced or slowing

Intrinsic Value ~₹1,450–₹1,480 CMP is near fair value zone

Valuation is reasonable, though PEG ratio flags caution on future growth expectations.

💻 Business Model & Competitive Edge

Sector: IT Services — software development, cloud, cybersecurity, infrastructure, and digital transformation.

Strengths

Global footprint across 60+ countries with strong client retention.

Strategic focus on AI, cloud, and engineering services.

Recent appointment of Amitabh Kant to the board adds public policy depth and strategic vision

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DII holding up (+0.73%) — strong domestic institutional confidence.

Challenges

FII holding down (−0.59%) — cautious foreign sentiment.

PEG ratio and recent price correction suggest tempered growth outlook.

RSI at 55.0 and MACD negative — technicals show short-term consolidation.

📉 Technicals & Entry Zone

Current Price: ₹1,494

DMA 50: ₹1,505 | DMA 200: ₹1,595 — trading below long-term average

MACD: Negative — momentum cooling

📌 Suggested Entry Zone: ₹1,450–₹1,480

A dip near intrinsic value or 50 DMA would offer a better margin of safety.

🧭 Long-Term Holding Guidance

Hold if invested: Strong fundamentals, global scale, and dividend yield make HCLTech a resilient long-term asset.

Accumulate on dips: Ideal for investors seeking exposure to India’s IT leadership and digital transformation wave.

For deeper insights, you can explore HCLTech’s stock overview and analyst ratings or read the latest boardroom update on Amitabh Kant’s appointment. Let me know if you'd like a peer comparison with Infosys or TCS.

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