HCLTECH - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.4

💼 Financials & Profitability Profile

EPS (₹62.6) with strong absolute quarterly PAT (₹3,843 Cr.) — robust earnings base.

ROCE (31.9%) & ROE (25.2%) — exceptional return metrics, signalling best-in-class capital utilization.

Debt-to-Equity (0.09) — low leverage gives financial flexibility and stability.

Dividend Yield (3.67%) — attractive yield for income investors.

High efficiency and returns make HCLTECH a power player within the IT services landscape.

📊 Valuation Insights

Metric Value Interpretation

P/E Ratio 23.5 Discount to industry average (29.1) — slight undervaluation

P/B Ratio ~5.73 Rich valuation — justified by ROE and asset-light model

PEG Ratio 2.60 High — suggests pricey growth; future growth should be tracked

Intrinsic Value — Estimated range ₹1,500–₹1,650 — currently undervalued

Valuation offers moderate upside with quality fundamentals, but PEG flags growth saturation concerns.

🧠 Business Model & Competitive Moats

Sector: Enterprise IT services, product engineering, digital transformation, and cloud solutions.

Strengths

Deep client relationships across BFSI, healthcare, and manufacturing.

Strong global delivery network and IP-driven services.

Healthy free cash flow and dividend payout track record.

Risks

Quarterly PAT dip (-9.73%) and FII outflow (-0.59%) show short-term sentiment weakness.

Sensitivity to global IT spending and hiring cycles.

📉 Technical Overview & Entry Strategy

Current Price: ₹1,472

DMA 50 / 200: ₹1,614 / ₹1,647 — stock is below major averages

RSI (21.9): Oversold territory — suggests bounce potential

MACD (-53.7): Strong bearish momentum

Volume Surge: Spike in trading activity — possible bottoming out phase

🛒 Suggested Entry Zone: ₹1,430–₹1,480 Look for stabilization or reversal patterns near ₹1,450 before entering. Avoid chasing breakouts prematurely.

🕰️ Long-Term Investment View

HCLTECH remains a resilient long-term compounder with income and growth characteristics

High dividend, stellar ROCE/ROE, and minimal debt lend durability

Best suited for core portfolio allocation within tech and digital themes

Track margin guidance and deal wins for confirmation of re-acceleration

Ready to see how HCLTECH stacks up against Infosys or Tech Mahindra? I can whip up a head-to-head matrix to benchmark competitive performance 🧮💻 Just give me the nod.

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