HCL Tech extends agreement with Xerox; stock hits all-time high

HCL Tech will assist Xerox with its reinvention to position the company for long-term profitable and sustainable growth.

HCL Technologies share price clocked an all-time high of Rs 1,757 per share on the BSE in Tuesday's (August 27) trade. The stock advanced after the information technology company extended its agreement with Xerox.

At around 11:33 AM, HCL Tech shares had pared their gains and were down 0.55 per cent or Rs 9.55 at Rs 1711.35 per share. The market capitalisation of the company stood at Rs 4.64 trillion.

Through an exchange filing, HCL Tech said that with the extension of the agreement, HCL Tech will assist Xerox with its reinvention, which is the fundamental and structural redesign of Xerox, to position the company for a long-term profitable and sustainable growth.

"HCL Tech will leverage automation, product, and sustenance engineering and process operations services—including order to cash, sales and marketing operations, supply chain, and Procurement—along with its advanced full-stack GenAI platform, HCLTech AI Force, to deliver a unified interface that transforms the way employees and clients engage with Xerox," HCLTech said.

With this extension, HCL Tech will support the newly formed Xerox Global Business Services organisation (GBS) to drive key business metrics, such as working capital, device connectivity, sales efficiency, and the effectiveness of remote problem-solving, it added.

The work will allow the GBS organisation to integrate innovative capabilities, further advancing the company’s digital transformation roadmap.

HCL Tech Q1FY25 result

HCL Tech's net profit for the first quarter of FY25 came in at Rs 4,257 crore. Profit were up 20.4 per cent year-on-year (Y-o-Y), and grew 6.8 per cent sequentially.

Revenue for the quarter grew 6.7 per cent Y-o-Y to Rs 28,057 crore. On a sequential basis, revenue growth was down 1.6 per cent.

The company’s new deal wins were solid at $1.96 billion up 25 per cent Y-o-Y, while down 14 per cent Q-o-Q.

As per analysts, the decline in IT Services was along expected lines–due to higher offshoring at one of the BFSI clients while ERD was affected by weakness in auto and productivity benefits being passed on to customers. While most other verticals reported Q-o-Q growth, led by the Telecom vertical.

After HCL Tech reported its Q1FY25 numbers, Kotak Institutional Equities maintained a ‘Buy’ on HCL Tech with a target price of Rs 1,800 (revised from Rs 1700 earlier). Similarly, Nomura also upgraded its target price for the IT major to Rs 1,720 with a ‘Buy’ call.