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HCL Tech shares hit a fresh record high as Co to acquire IT firm DWS Ltd

The acquisition is expected to be completed by December 2020.

HCL Technologies | Buzzing stocks | IT stocks

SI Reporter  |  Mumbai 

Several corporate houses such as Reliance Industries, HCL and GMR have guest houses at Tirumala
In the past six trading days, the stock has rallied 16 per cent after the IT major raised its outlook for the September quarter.

Shares of hit a fresh record high of Rs 835, up 3 per cent on the BSE in the early morning deals on Monday after the company announced its intent to acquire IT company DWS Limited, a leading Australian IT, business, and management consulting group, for $158.2 million (approximately Rs 1,162 crore). The acquisition is expected to be completed by December 2020. The stock surpassed its previous high of Rs 824 touched on Friday, September 18, 2020.

DWS is a provider of IT, Business, and Management Consulting services in Australia and New Zealand. The suite of solutions provided by DWS covers, but not limited to, Digital Transformation, IT, Business and Management Consulting services, Data and Business Analytics, and Robotic Process Automation services. CLICK HERE TO VIEW THE PRESS RELEASE

“The acquisition is a step towards enhancing HCL Techs’ presence in the Australia and New Zealand region. The acquisition helps HCL expand its coverage of clients and use the acquired customer base to offer its expanded portfolio of services,” HCL Tech said in a BSE filing.

“While the detailed financials are not available, we believe HCL Tech will be able to expand its presence in Australia and New Zealand through this acquisition and will add around 2 per cent to the company's revenues,” ICICI Securities said in a note.

Meanwhile, in the past six trading days, the stock has rallied 16 per cent after the IT major raised its outlook for the September quarter in a mid-quarter update. HCL Tech, on September 14, said it expects the revenue and the operating margin for the July-September quarter (Q2FY21) to be meaningfully better than the top end of the guidance it had provided in July' 2020.

"We have seen strong execution during the quarter to date, and continue to execute to the plan this month. The revenue growth for the current quarter is expected to exceed 3.5 per cent quarter-on-quarter (QoQ) in constant currency (CC), enabled by broad-based momentum across all service lines, verticals, and geographies," said.

The IT major further said the earnings before interest and tax (EBIT) margin for the current quarter is expected to be between 20.5 per cent and 21.0 per cent. Good booking momentum continues this quarter, led by life sciences & healthcare, telecom & media, and financial services verticals. The pipeline continues to look healthy across service lines, verticals, and geographies, it said.

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First Published: Mon, September 21 2020. 09:21 IST