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Last Updated on: 21 November, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo
Stock Ticker - BSE: 532281 | NSE: HCLTECH

HCL Technologies Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: November 21, 2024, 10:05 pm

Market Cap 4,98,420 Cr.
Current Price 1,836
High / Low1,897/1,235
Stock P/E29.6
Book Value 254
Dividend Yield2.83 %
ROCE29.6 %
ROE23.3 %
Face Value 2.00
PEG Ratio4.08

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for HCL Technologies Ltd

Competitors of HCL Technologies Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
IDream Film Infrastructure Company Ltd 1.41 Cr. 93.899.0/85.0 2950.00 %%% 10.0
IB Infotech Enterprises Ltd 23.4 Cr. 182245/11030.7 16.80.55 %69.9 %50.5 % 10.0
Hit Kit Global Solutions Ltd 6.54 Cr. 1.411.41/0.5820.4 2.080.00 %1.92 %1.94 % 2.00
Globalspace Technologies Ltd 59.5 Cr. 17.327.0/16.2180 11.20.00 %%% 10.0
First Fintec Ltd 8.64 Cr. 8.3010.9/4.51 10.20.00 %2.41 %1.77 % 10.0
Industry Average39,977.65 Cr703.7691.08122.740.67%18.02%18.80%6.94

All Competitor Stocks of HCL Technologies Ltd

Quarterly Result

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales19,30219,64120,06820,65522,33122,59723,46424,68626,70026,60626,29626,67228,446
Expenses13,67815,09215,00615,63316,93817,54518,48919,26120,33520,74320,93120,74321,659
Operating Profit5,6244,5495,0625,0225,3935,0524,9755,4256,3655,8635,3655,9296,787
OPM %29%23%25%24%24%22%21%22%24%22%20%22%24%
Other Income189244255240255317409236260453344365370
Interest1471598983826564791169486156140
Depreciation1,1871,2671,1281,0781,1369849839981,1371,0279271,0101,143
Profit before tax4,4793,3674,1004,1014,4304,3204,3374,5845,3725,1954,6965,1285,874
Tax %11%67%22%20%22%17%24%24%24%23%25%25%26%
Net Profit3,9771,1113,2133,2633,4483,5993,2813,4874,0963,9813,5313,8334,351
EPS in Rs14.634.0611.8112.0112.6813.2412.1012.8615.0914.6813.0214.1216.03

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthJun 2012Jun 2013Jun 2014Jun 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales20,83125,58132,14436,70131,13647,56850,56960,42770,67675,37985,651101,456108,020
Expenses17,13519,90124,10828,21524,48237,17839,32346,50153,36055,33165,12278,82884,076
Operating Profit3,6955,6808,0358,4866,65410,39011,24613,92617,31620,04820,52922,62823,944
OPM %18%22%25%23%21%22%22%23%24%27%24%22%22%
Other Income2063326771,1268711,0691,2309435899271,0671,3581,532
Interest14310611491748969174505511319353476
Depreciation5496376814044108281,3832,0733,4204,6114,3264,1454,107
Profit before tax3,2105,2707,9179,1177,04110,54211,02412,62213,98015,85316,95119,48820,893
Tax %24%23%18%20%20%18%21%20%21%30%20%24%
Net Profit2,4234,0406,5287,3425,6028,6068,72210,12011,05711,16913,52314,84515,696
EPS in Rs8.7414.4923.2526.0219.8630.1631.3237.3140.7541.0749.7454.7357.85
Dividend Payout %34%21%11%58%40%40%19%11%25%24%84%88%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)53.62%1.35%16.03%9.26%1.01%21.08%9.78%
Change in YoY Net Profit Growth (%)0.00%-52.28%14.68%-6.77%-8.25%20.06%-11.30%

HCL Technologies Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 7 years from 2016-2017 to 2022-2023.

Growth

Compounded Sales Growth
10 Years:16%
5 Years:13%
3 Years:13%
TTM:7%
Compounded Profit Growth
10 Years:15%
5 Years:9%
3 Years:12%
TTM:9%
Stock Price CAGR
10 Years:16%
5 Years:27%
3 Years:18%
1 Year:38%
Return on Equity
10 Years:24%
5 Years:22%
3 Years:23%
Last Year:23%

Last Updated: Unknown

Balance Sheet

Last Updated: October 15, 2024, 3:39 pm

MonthJun 2013Jun 2014Jun 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024Sep 2024
Equity Capital139140281282285278271543543543543543543
Reserves13,02519,41023,94327,10932,66436,10841,09550,72459,37061,37164,86267,72068,332
Borrowings1,0441,0186481,0905825574,1957,9866,8646,3434,7945,7585,791
Other Liabilities8,1919,41210,37210,85912,23111,04612,78823,56619,27020,66423,05124,98525,097
Total Liabilities22,39929,98035,24539,34145,76247,98958,34982,81986,04788,92193,25099,00699,763
Fixed Assets6,7537,4448,2759,71615,23518,75322,88837,49037,14535,07734,61935,06334,480
CWIP49453155261144832023540031212940108172
Investments7136628696981,3062,6602,3057,0666,8626,3515,4957,1377,642
Other Assets14,44021,34325,54828,31528,77326,25632,92137,86341,72847,36453,09656,69857,469
Total Assets22,39929,98035,24539,34145,76247,98958,34982,81986,04788,92193,25099,00699,763

Reserves and Borrowings Chart

Cash Flow

MonthJun 2013Jun 2014Jun 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity +4,4926,4575,5393,8238,9958,3288,97113,35919,61816,90018,00922,448
Cash from Investing Activity +-2,361-4,842-2,088-2,208-3,890-2,236-3,256-12,332-5,6651,597-3,573-6,608
Cash from Financing Activity +-2,086-1,308-3,140-2,237-4,517-5,714-1,471-3,168-11,192-14,508-15,881-15,464
Net Cash Flow44307311-6235883784,244-2,1412,7613,989-1,445376

Free Cash Flow

MonthJun 2012Jun 2013Jun 2014Jun 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Free Cash Flow3.004.007.00-640.005.00-572.00-546.009.0010.0014.0014.0018.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthJun 2013Jun 2014Jun 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days646565916470717385889285
Inventory Days
Days Payable
Cash Conversion Cycle646565916470717385889285
Working Capital Days151029643859492752484735
ROCE %41%45%40%28%34%31%31%27%26%25%28%30%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthSep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Promoters60.33%60.33%60.72%60.72%60.72%60.72%60.82%60.82%60.82%60.82%60.82%60.82%
FIIs22.30%20.43%18.97%17.91%17.17%18.29%18.92%18.98%18.80%19.42%19.65%18.45%
DIIs12.47%13.74%14.68%15.54%16.52%15.85%15.28%15.33%15.62%15.12%14.95%15.77%
Government0.02%0.02%0.02%0.02%0.02%0.02%0.02%0.02%0.02%0.02%0.02%0.02%
Public4.88%5.28%5.38%5.59%5.34%4.89%4.74%4.63%4.54%4.40%4.35%4.65%
Others0.00%0.20%0.23%0.23%0.23%0.23%0.23%0.23%0.21%0.21%0.21%0.28%
No. of Shareholders6,53,5927,78,1129,08,0559,95,79610,89,3179,91,5489,40,0799,09,3598,79,1208,52,9028,55,9609,50,147

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
SBI Nifty 50 ETF19,162,0151.763019.934,983,8862024-11-20284.48%
Parag Parikh Flexi Cap Fund18,706,9735.362948.224,983,8862024-11-20275.35%
HDFC Flexi Cap Fund - Regular Plan15,200,0005.032395.524,983,8862024-11-20204.98%
SBI S&P BSE Sensex ETF13,554,0152.042135.844,983,8862024-11-20171.96%
ICICI Prudential Technology Fund5,965,6587.68940.194,983,8862024-11-2019.7%
Aditya Birla Sun Life Flexi Cap Fund5,791,2564.66912.74,983,8862024-11-2016.2%
ICICI Prudential Bluechip Fund5,431,0281.72855.934,983,8862024-11-208.97%
Mirae Asset Large Cap Fund5,311,8902.21837.154,983,8862024-11-206.58%
UTI Nifty 50 ETF5,306,3601.76836.284,983,8862024-11-206.47%
Tata Digital India Fund4,983,8868.1785.464,983,8862024-11-200%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue2.002.002.002.002.00
Basic EPS (Rs.)57.9954.8549.7741.0740.75
Diluted EPS (Rs.)57.8654.7949.7741.0740.75
Cash EPS (Rs.)73.2369.9465.7558.1253.32
Book Value[Excl.RevalReserv]/Share (Rs.)251.46240.88228.38221.30189.40
Book Value[Incl.RevalReserv]/Share (Rs.)251.46240.88228.38221.30189.40
Revenue From Operations / Share (Rs.)404.84373.69315.47277.64260.32
PBDIT / Share (Rs.)94.6388.3579.5577.2665.95
PBIT / Share (Rs.)79.2673.0863.6160.2753.35
PBT / Share (Rs.)77.2371.7862.4458.3951.49
Net Profit / Share (Rs.)57.8654.6849.8141.1440.73
NP After MI And SOA / Share (Rs.)57.8354.7049.7241.0540.73
PBDIT Margin (%)23.3723.6425.2127.8225.33
PBIT Margin (%)19.5719.5520.1621.7020.49
PBT Margin (%)19.0719.2019.7921.0319.78
Net Profit Margin (%)14.2914.6315.7814.8115.64
NP After MI And SOA Margin (%)14.2814.6315.7614.7815.64
Return on Networth / Equity (%)23.0022.7021.8018.6021.56
Return on Capital Employeed (%)27.9227.5624.5823.7824.47
Return On Assets (%)15.7315.8915.1612.9313.33
Long Term Debt / Equity (X)0.030.030.060.060.05
Total Debt / Equity (X)0.030.030.060.060.09
Asset Turnover Ratio (%)1.140.640.580.510.58
Current Ratio (X)2.612.502.562.481.62
Quick Ratio (X)2.602.492.552.471.62
Dividend Payout Ratio (NP) (%)89.6787.5084.3829.2212.27
Dividend Payout Ratio (CP) (%)70.8468.4063.9020.679.37
Earning Retention Ratio (%)10.3312.5015.6270.7887.73
Cash Earning Retention Ratio (%)29.1631.6036.1079.3390.63
Interest Coverage Ratio (X)46.4667.9567.7041.0535.46
Interest Coverage Ratio (Post Tax) (X)29.4143.0543.3922.8622.90
Enterprise Value (Cr.)401190.95282423.30307290.53262115.68118448.63
EV / Net Operating Revenue (X)3.652.783.593.481.68
EV / EBITDA (X)15.6111.7714.2312.506.62
MarketCap / Net Operating Revenue (X)3.812.913.693.541.68
Retention Ratios (%)10.3212.4915.6170.7787.72
Price / BV (X)6.144.515.104.462.31
Price / Net Operating Revenue (X)3.812.913.693.541.68
EarningsYield0.030.050.040.040.09

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of HCL Technologies Ltd as of November 21, 2024 is: 1,801.36

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of November 21, 2024, HCL Technologies Ltd is Overvalued by 1.89% compared to the current share price 1,836.00

Intrinsic Value of HCL Technologies Ltd as of November 21, 2024 is: 1,932.13

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of November 21, 2024, HCL Technologies Ltd is Undervalued by 5.24% compared to the current share price 1,836.00

Last 5 Year EPS CAGR: 7.26%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a high average ROCE of 32.17%, which is a positive sign.
  2. The company has higher reserves (43,517.92 cr) compared to borrowings (3,590.00 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (56.92 cr) and profit (11.31 cr) over the years.
  1. The stock has a high average Working Capital Days of 39.42, which may not be favorable.
  2. The stock has a high average Cash Conversion Cycle of 76.08, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in HCL Technologies Ltd:
    1. Net Profit Margin: 14.29%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 27.92% (Industry Average ROCE: 18.02%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 23% (Industry Average ROE: 18.8%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 29.41
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 2.6
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 29.6 (Industry average Stock P/E: 91.08)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 0.03
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

HCL Technologies Ltd. is a Public Limited Listed company incorporated on 12/11/1991 and has its registered office in the State of Delhi, India. Company’s Corporate Identification Number(CIN) is L74140DL1991PLC046369 and registration number is 046369. Currently Company is involved in the business activities of Computer programming, consultancy and related activities. Company’s Total Operating Revenue is Rs. 40638.00 Cr. and Equity Capital is Rs. 543.00 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
IT Consulting & Software806, Siddharth, New Delhi Delhi 110019investors@hcl.com
http://www.hcltech.com
Management
NamePosition Held
Mr. Shiv NadarChairman Emeritus
Ms. Roshni Nadar MalhotraNon Exe. Non Ind Chairperson
Mr. C VijayakumarManaging Director & CEO
Mr. Shikhar MalhotraNon Exe.Non Ind.Director
Ms. Robin Ann AbramsInd. Non-Executive Director
Dr. Sosale Shankara SastryInd. Non-Executive Director
Mr. Subramanian MadhavanInd. Non-Executive Director
Mr. Thomas SieberInd. Non-Executive Director
Ms. Nishi VasudevaInd. Non-Executive Director
Mr. Deepak KapoorInd. Non-Executive Director
Dr. Mohan ChellappaInd. Non-Executive Director
Mr. Simon John EnglandInd. Non-Executive Director
Ms. Vanitha NarayananInd. Non-Executive Director
Mr. R SrinivasanInd. Non-Executive Director
Ms. Bhavani BalasubramanianInd. Non-Executive Director
Ms. Lee Fang ChewInd. Non-Executive Director

FAQ

What is the latest intrinsic value of HCL Technologies Ltd?

The latest intrinsic value of HCL Technologies Ltd as on 21 November 2024 is ₹1801.36, which is 1.89% lower than the current market price of ₹1,836.00.

What is the Market Cap of HCL Technologies Ltd?

The Market Cap of HCL Technologies Ltd is 4,98,420 Cr..

What is the current Stock Price of HCL Technologies Ltd as on 21 November 2024?

The current stock price of HCL Technologies Ltd as on 21 November 2024 is ₹1,836.

What is the High / Low of HCL Technologies Ltd stocks in FY 2024?

In FY 2024, the High / Low of HCL Technologies Ltd stocks is 1,897/1,235.

What is the Stock P/E of HCL Technologies Ltd?

The Stock P/E of HCL Technologies Ltd is 29.6.

What is the Book Value of HCL Technologies Ltd?

The Book Value of HCL Technologies Ltd is 254.

What is the Dividend Yield of HCL Technologies Ltd?

The Dividend Yield of HCL Technologies Ltd is 2.83 %.

What is the ROCE of HCL Technologies Ltd?

The ROCE of HCL Technologies Ltd is 29.6 %.

What is the ROE of HCL Technologies Ltd?

The ROE of HCL Technologies Ltd is 23.3 %.

What is the Face Value of HCL Technologies Ltd?

The Face Value of HCL Technologies Ltd is 2.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in HCL Technologies Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE