HCL Tech surges 5% on signing contract with reinsurers Munich Re

In the past one month, HCL Technologies has outperformed the market by surging 18 per cent at the bourses, as compared to 5 per cent rise in the S&P BSE Sensex.

Shares of HCL Technologies surged 5 per cent to hit a new high of Rs 1,168 on the BSE in intra-day trade on Monday, after the company said it has signed a contract with Munich Re, one of the world’s leading reinsurers, to create a nextgeneration 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 said in release.

The company further said it will adopt a “glocal” strategy to support Munich Re’s global workforce in multiple languages, including German, Spanish and Mandarin, from near-shore locations. HCL will also implement a highly personalized service desk solution and leverage the power of automation and self-service capabilities to improve efficiency and enhance employee user experiences, the company said.

Last week, HCL Technologies had 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. Wacker currently operates 26 production sites. Wacker’s engagement with HCL will lead to significant cost efficiencies through modernisation, standardisation and automation. HCL will be using AI-enabled virtual assistants to drive efficiencies for Wacker.

In the past one month, HCL Technologies has outperformed the market by surging 18 per cent, as compared to 5 per cent rise in the S&P BSE Sensex.

The company is confident of delivering good sequential growth over Q2-Q4 on the back of broad-based demand, strong order bookings ($1.7 billion, 37 per cent YoY), and robust deal pipeline (at all-time high). The management has retained its double-digit growth guidance for FY22 and expects growth to further accelerate in FY23.

“HCL Technologies has guided for 19-21 per cent EBIT (earnings before interest tax) margin for FY22, factoring in wage hikes, gradual normalization of travel & other costs, and planned investments in leadership augmentation, sales teams in certain geographies and Mode 2 capabilities,” analysts at Emkay Global Financial Services said in a recent note on the company. The brokerage firm maintains a 'buy' rating on the stock with a target price of Rs 1,280 at 22x Jun’23E EPS.