HCL technologies stock analysis | Fundamental analysis | Best IT stocks to invest

 

                    Analysis of HCL technologies 

1. Company and its industry 

2. Management and its business model

3. Fundamentals

4. Growth 

5. Valuation

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                                Company 

Overview - HCL was founded in 11 august 1976 by shiv nadar , Its headquarter at noida (up), India. It was an Indian multinational information technology (IT) services and consulting company.

* HCL tech have customers include 250 of the Fortune 500 and 650 of the global 2000 companies.

* The  company has offices in 32 countries around the globe.

* Company established its business in 46 countries.

* HCL tech is the fastest growing large- cap IT company.

* Company sells their products in 157 nationalities.

* 58 innovation lab across the globe.

* 225 delivery centre’s across the globe.

Subsidiary & associated company - Company have 137 subsidiary and 11 associated companies.

Share holdings of promoter 

Share holdings of DII - 

Share holdings of FII - 

Business of company - HCL technologies offers an integrated portfolio of products and services through three business unit. These are IT and business services(ITBS), Engineering and R&D services(ERS) and  products and platform(P&P).

Extra information - Company have 150423 employees and company pays 45628 crore as a salary.

       

                               Industry 

* The digital technologies transform the business models around the globe, enterprises are increasing their technology spending.

* Investment in digital, analytical, cloud, internet of things(IOT), cyber security and other emerging technologies have been growing exponentially in  nearly every large enterprises.

* The demand for digital technologies accelerates and cost savings create opportunities to replace traditional technologies.

* Technology services companies are investing in software products and platforms that transform them into end-to-end solution providers. They are using merger and acquisition to acquire digital capabilities and access into newer geographies.

* While covid-19 disrupt the world economy, but the demand for digital technologies has continued to be strong.

* The Indian IT industry is expected to touch the 300-350 billion dollars revenue in next five years, with the growth of 10% a year.

* This growth of the Indian IT industry will come primarily on the back of digital services, which currently account for 30% of the industry revenue, but its share is expected to go up to 50% over the next five 

Year.

                            Management 

Management mode 1-2-3 strategy - 

Return on equity (ROE) -

Return on capital employed (ROCE) - 

Return on Assets - 17.4

Total management salary - 10.1 crore.

R&D expenditure - 1.17 % of revenue.

         

                                Business 

Revenue break up - 

Geographical wise break up - 

Company turnover from activities - 

Company clients from different sectors - Financial services, life sciences & health care industry, manufacturing industry, public services, retail and consumer package goods industry, technology industry, telecom, media and entertainment industry.

Company have more than 100 million clients.

    

                             Fundamentals 

* Market cap - 2,47,038 crore

* Balance sheet - 

* Current ratio - 1.69 

* Debt to equity - 0.11 

* Interest coverage ratio - 48

* P&L statement - 

* Cash flow to profit ratio ( 5 years ) -  1.19

* Debtor days - 

* Investment - 7,066 crore

* Tangible assets - 5494 crore

* Intangible assets - 13,194 crore

                                    Growth 

* Sales growth - 

* Profit growth - 

* Share price growth - 

                                   Valuation 

* P.E ratio - 22

* Industry PE ratio - 28

* PEG ratio - 1.5

* PB ratio - 4.12

* Intrinsic value formula - ₹1600

# intrinsic value formula:-(2*G + 8.5) * EPS

Where G stand for growth(5years) 

EPS stand for earn per share

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