HCLTech Surges Ahead: Q2 Profits Soar 11% as IT Giant Outshines Expectations!

HCL Technologies Ltd has announced impressive financial results for its fiscal second quarter, showcasing an 11% year-on-year increase in net profit, which reached ₹4,235 crore. This figure not only surpasses analysts' expectations but also highlights the company's resilience in a competitive market. Revenue from operations for the July-September 2025 period rose to ₹28,862 crore, marking an 8.2% increase compared to the same period last year.

Quarter-on-Quarter Analysis
Despite the robust annual growth, HCLTech experienced a slight decline in net profit of 0.5% when compared to the previous quarter. However, revenue saw a more favorable 3% increase sequentially. The earnings before interest and taxes (EBIT) margin also improved, coming in at 18.6%, a rise of 149 basis points from the previous quarter.

Comparison with Analysts' Forecasts
According to a Moneycontrol poll, analysts had predicted a modest revenue growth of 1.6% quarter-on-quarter to ₹28,517 crore, alongside a forecasted 5.5% decline in profit after tax (PAT) to ₹4,024 crore. The actual results exceeded these estimates across the board, demonstrating the company's strong performance.

Full-Year Revenue Growth Guidance
For the fiscal year 2025, HCLTech has revised its revenue growth guidance upwards in constant currency terms, increasing the lower end by 50 basis points. The new guidance now ranges from 3.5% to 5%. The company has maintained its EBIT margin guidance at 18% to 19% for the full year.

CEO's Insights on Performance
C Vijayakumar, CEO and Managing Director of HCLTech, expressed satisfaction with the company's performance, emphasizing that revenue growth of 1.6% QoQ in constant currency and an EBIT of 18.6% reflect a strong operational foundation. He noted that the growth was well-distributed across various sectors, geographies, and offerings, underscoring HCL Software's impressive 9.4% year-on-year growth.

Future Outlook and Innovations
Looking ahead, Vijayakumar highlighted a strong pipeline in areas such as Data & AI, Digital Engineering, and SAP migration. He mentioned that the company's generative AI offerings, including AI Force and AI Foundry, are resonating with clients and are expected to drive efficiency, growth, and innovation in the medium term.

New Deal Wins and Dividends Declared
In Q2, HCLTech reported net new deal wins totaling $2.21 billion, up from $1.96 billion in the previous quarter. Additionally, the company declared an interim dividend of ₹12 per share, bringing the total interim dividend for the fiscal year so far to ₹42 per share. This includes previous interim dividends of ₹18 per share in May and ₹12 per share in July.

Conclusion
HCLTech's strong Q2 performance not only surpasses market expectations but also reflects its strategic focus on innovation and operational efficiency. The company's upward revision of revenue guidance and commitment to maintaining robust EBIT margins further solidify its position as a leading player in the IT sector. With a solid pipeline and strong financial health, HCLTech appears well-equipped to navigate the challenges and opportunities ahead in the digital economy.

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Angel One Shares Surge Over 7% as Investec Predicts Major Upside, Maintains 'Buy' Recommendation

Stock Performance: On October 3, 2024, Angel One's stock surged by over 7%, following a 'Buy' recommendation from Investec, a global brokerage firm. The share price climbed to ₹2,767.95 on the National Stock Exchange (NSE), up by 6.46%. This marked the stock's fourth consecutive day of gains, with an 11.61% rise over the period. The broader market, meanwhile, was navigating the impact of new F&O regulations imposed by SEBI. However, Angel One's stock showed resilience in this environment, bolstered by the positive outlook from Investec.

Over the last year, Angel One's stock has surged by 50.06%, and in the past three years, it has gained 102.42%, reflecting its strong market performance. The company's consistent growth has been attributed to its ability to navigate regulatory challenges and capitalize on favorable market trends.

Brokerage Call and Forecast: Investec reiterated its 'Buy' rating on Angel One, citing strong future growth potential. The brokerage also raised its profit-after-tax (PAT) estimates for FY26 by 7%. The new price target set by Investec stands at ₹3,000 per share, offering significant upside from the current price levels. According to the brokerage report, the impact of the newly announced SEBI F&O regulations on Angel One's volumes is expected to be lower than initially feared. The revised guidelines indicate a 25% reduction in F&O volumes, down from the earlier estimate of 30%, due to less severe regulatory changes.

Additionally, Angel One has strategically increased its prices to mitigate the regulatory impact, allowing the company to sustain revenue growth. Investec emphasized that the firm has multiple avenues to continue increasing revenue in the future, further reinforcing its bullish stance on the stock.

SEBI's New F&O Norms: SEBI's recent decision to tighten F&O (futures and options) trading norms had sparked concerns across the brokerage industry. However, the final regulations turned out to be less stringent than initially anticipated, leading to a less pronounced impact on trading volumes. Despite these changes, Angel One has proactively adjusted its pricing structure, demonstrating its agility in navigating regulatory environments.

Financial Performance: Angel One has delivered strong financial performance in the April-June quarter of FY25. The company reported a net profit of ₹297 crore, marking a 36% year-on-year (YoY) growth. Revenue surged by 74% YoY to ₹1,394 crore, compared to ₹802 crore in the same period last year. On the operating front, Angel One's EBITDA rose by nearly 49% YoY to ₹474 crore, up from ₹317 crore in the year-ago quarter.

This impressive financial growth has been driven by Angel One's expanding customer base and effective cost management strategies. The company's performance in Q1FY25 has further strengthened investor confidence, especially with the brokerage's ability to generate strong revenues even in a challenging regulatory environment.

Outlook: With a robust financial performance and the brokerage community's support, Angel One is well-positioned for continued growth. Investec's upgraded PAT forecast and its ₹3,000 price target underline the potential for further upside in the stock. Despite regulatory headwinds, Angel One's proactive measures, including price hikes and strategic growth levers, have set it on a path of sustained profitability and market leadership.

Conclusion: Angel One's ability to adapt to regulatory changes while maintaining strong financial performance has solidified its position in the market. With Investec's optimistic outlook and a substantial price target, the stock remains an attractive investment opportunity, particularly for long-term investors seeking exposure to the financial services and broking sector.

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