HCL Technologies gains 2% after fixing record date for bonus issue

The company fixed December 7, as record date for the 1:1 bonus share.

Shares of HCL Technologies climbed 2 per cent at Rs 1,135 on the BSE on Wednesday after the IT company fixed December 7 as the record date for the 1:1 bonus share. The stock will turn ex-bonus on December 5, 2019.

The board of directors of HCL Tech at their meeting held on October 23, had approved and recommended issue of one bonus share for every one equity share held by the equity shareholders of the Company.

Since October 23, HCL Tech has outpaced the market by gaining 7 per cent on the BSE. In comparison, the S&P BSE Sensex and the S&P BSE IT index were up 5 per cent and 3 per cent, respectively.  The stock is trading close to its all-time high of Rs 1,190, touched on April 30, 2019.

Meanwhile, HCL Tech had revised guidance up by 100bps+ to 15 per cent-17 per cent in constant currency (CC) for FY20.

“More importantly the company now expects organic growth of about 10-11 per cent for the year which is quite encouraging given weak outlook shared by most of the peers during the earnings commentary”, analysts at Dolat Capital said in Q2 result update.

“Strong operating performance, upward revision in guidance, robust outlook and confident commentary reinforces our preferred pick view on the stock. We largely retain our operating estimates for the business and retain our ACCUMULATE rating on the stock with revised target price of Rs 1,285 valued at 15x PER on FY21E earnings (higher multiple justified given superior financial performance),” the brokerage firm said.