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INVESTMENT INSIGHTS

Check Before You Invest : HCL Technologies Ltd

BSE: 532281 NSE: HCLTECH ISIN: INE860A01027
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does HCL Technologies Ltd belong to?
HCL Technologies Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is HCL Technologies Ltd a good quality company?
HCL Technologies Ltd is a good quality company, based on a consistently good 10 year financial track record.
Q.3 Is HCL Technologies Ltd undervalued or overvalued?
HCL Technologies Ltd appears Fair, as its key valuation ratios are in line with their past averages.
Q.4 Is HCL Technologies Ltd a good buy now?
HCL Technologies Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of HCL Technologies Ltd?
HCL Technologies Ltd revenue growth is 6.5% for FY-2025 , which is below its 5 year CAGR of 10.6% , indicating slower growth.
Q.2 Gross Profit margin of HCL Technologies Ltd?
HCL Technologies Ltd Gross profit margin which is the profit after deduction of direct costs, is 23.4% for FY-2025 , which is in line with its 5 year median of 23.4% , indicating stable margins.
Q.3 Operating Profit Margin of HCL Technologies Ltd?
HCL Technologies Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 21.79% for FY-2025 , which is below its 5 year median of 22.3% indicating decreasing margins.
Q.4 Net Profit Margin of HCL Technologies Ltd?
HCL Technologies Ltd Net Profit Margin is 14.86% for FY-2025 , is above with its 5 year median of 14.82%, indicating increasing margins.
Current Level Historic Median
Gross Profit Margin 23.4 23.4
Operating Profit Margin 21.79 22.3
Net Profit Margin 14.86 14.82
Q.5 Return on Asset of HCL Technologies Ltd?
HCL Technologies Ltd Return on Asset is 17.12%, which is above its 5 year historical median of 16.46%, indicating improved asset utilization efficiency.
Q.6 Return on Equity (ROE) of HCL Technologies Ltd?
HCL Technologies Ltd Return on equity is 25.4% for FY-2025 , which is above its historical median of 23.41%, indicating the business is making better use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of HCL Technologies Ltd?
HCL Technologies Ltd Return on capital employed is 33.54% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 11.25%, indicating value creation.
Q.8 Cash conversion cycle of HCL Technologies Ltd?
HCL Technologies Ltd Cash conversion cycle is 51 days, above its historical median of 51 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 1.15 1.13
ROE 25.4 23.41
ROCE 33.54 29.71
Cash Conversion Cycle 51 days 51 days
Q.9 Debt to Equity ratio of HCL Technologies Ltd?
HCL Technologies Ltd Debt-to-Equity ratio is 0.03 , which is in line with the industry average of 0.03 , indicating similar to debt levels in the industry.
Q.10 Debt to cash flow from operations of HCL Technologies Ltd?
HCL Technologies Ltd Debt to cash flow from operations is 0.1 , which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of HCL Technologies Ltd?
Promoters hold 60.81% of the HCL Technologies Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of HCL Technologies Ltd vs industry peers?
HCL Technologies Ltd revenue CAGR is 10.62% , compared to the industry median CAGR of 11.32% , indicating slower growth and losing its market share.
Profit Metrics
Current Level Industry Median
Revenue 1,17,055 1,17,927.7
Gross Profit 27,390.9 27,851.9
Operating Profit 25,496 25,544
Net Profit 17,399 17,737.5
Operating Efficiency
Current Level Industry Median
Asset Turnover 1.15 1.28
ROE 25.4 26.41
ROCE 33.54 35.53
Cash Conversion Cycle (days) 50.95 44

Valuation & price assessment

Q.1 Stock return of HCL Technologies Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 13.2% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 13.2% 7.3% 11.4% 0.3%
Q.3 Valuation ratios of HCL Technologies Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 23.92 16.37 22.96
Price to Book 5.23 3.55 2.61
Price to Sales 3.11 2.67 4.40
EV to EBITDA 13.21 10.03 17.20

Check more companies

1. TCS
2. Infosys
3. HCL Tech.
4. Wipro
5. Tech Mahindra
6. LTM
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