HCL Tech stock will continue to outperform peers: SMC Global Securities

The company has signed many deals and the management is looking confident about the future, says Saurabh Jain, Assistant VP – Research (Retail Equities).

What is your view on HCL Tech’s numbers? What are your key takeaways?
The numbers have come quite better than the market expectation. They have done well and have weakened their own guidance for FY20. I think they have signed up many deals; approximately 14 transformation deals were signed in Q4 FY20 and the management is looking quite confident about the future. I do not think they have guidance for FY21 as many companies in the industry have done the same but I think given the way they have performed and given the way the management is indicating that the Covid situation will not affect them, it is quite good in terms of the expectations of the market. The stock will continue to outperform in the IT pack.

What would now be your call on the stock? What would you advise?
Our advice is we continue to buy HCL Technologies. I think the management has come out with a decent level at which one can see the upside from here onwards and the acquisition of IBM is also working well for the company. I expect 15-20% upside from the current prices.