HCL Technologies hits new high; stock surges 16% in one month

HCL Tech's exposure to deeply troubled verticals - Energy, Transportation, Travel, Hospitality, and Retail - remains lower relative to its peers, which bodes well for the company's growth outlook

Shares of HCL Technologies hit a new high of Rs 1,193.15, up 3 per cent on the BSE in the intra-day trade on Tuesday, after the company announced investment of $1.25 million in Series A preferred shares of Austin GIS Inc., a Delaware-based entity.

Austin GIS, Inc., a newly formed entity, is raising funds via Series A preferred shares investment from shareholder investors. This is to tap growth opportunity in Internet of Things (IoT) and 5G RAN industries, which complements HCL's services as an IT service provider.

The company said it will make $1.25-million cash investment through HCL Bermuda Limited, a wholly owned subsidiary of HCL Technologies.

In the past one month, the stock of HCL Tech has outperformed the market by surging 16 per cent, as compared to a 8.5 per cent rise in the S&P BSE Sensex.

Last week, HCL Tech said it has signed a contract with Munich Re, one of the world’s leading reinsurers, to create a next generation digital workplace for its workforce. "Building on the successes of its strategic digital transformation partnership with Munich Re, HCL will now modernize and standardize workplace services for more than 16,000 employees in 40 countries," HCL Technologies had said in a release.

Prior to that, the company on Auguts 19 said it has signed a five-year, end-to-end information technology transformation services deal with Wacker Chemie AG, a German multinational chemical company, to establish a modernized digital workplace and improve its quality-of-service delivery.

According to analysts, HCLT's exposure to deeply troubled verticals – Energy, Transportation, Travel, Hospitality, and Retail – remains lower relative to its peers. It has a higher exposure to Financial Services, Technology Services, and Life Sciences, where analysts at Motilal Oswal Financial Services anticipate a better outlook.

"Higher exposure to IMS (37 per cent of revenue), comprising a larger share of nondiscretionary spend, offers a better resilience to its portfolio in the current context, with increased demand for Cloud, Network, Security, and Digital workplace services. Given its deep capabilities in the IMS space and strategic partnerships, investments in Cloud, and Digital capabilities, we expect HCLT to emerge stronger on the back of an expected increase in enterprise demand for these services," the brokerage said.