Shares of HCL Technologies hit a fresh record high of Rs 835, up 3 per cent on the BSE within the early morning deals on Monday after the corporate announced its intent to accumulate IT company DWS Limited, a number one Australian IT, business, and service industry group, for $158.2 million (approximately Rs 1,162 crore). The acquisition is predicted to be completed by December 2020. The stock surpassed its previous high of Rs 824 touched on Friday, September 18, 2020.
DWS may be a provider of IT, Business, and service industry services in Australia and New Zealand. The suite of solutions provided by DWS covers, but not limited to, Digital Transformation, IT, Business and service industry services, Data and Business Analytics, and Robotic Process Automation services.
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“The acquisition may be a step towards enhancing HCL Techs’ presence within the Australia and New Zealand region. The acquisition helps HCL expand its coverage of clients and use the acquired customer base to supply its expanded portfolio of services,” HCL Tech said during a BSE filing.
“While the detailed financials aren't available, we believe HCL Tech are going to be ready to expand its presence in Australia and New Zealand through this acquisition and can add around 2 per cent to the company's revenues,” ICICI Securities said during a note.
Meanwhile, within the past six trading days, the stock has rallied 16 per cent after the IT major raised its outlook for the September quarter during a mid-quarter update. HCL Tech, on September 14, said it expects the revenue and therefore the operating margin for the July-September quarter (Q2FY21) to be meaningfully better than the highest end of the guidance it had provided in July' 2020.
"We have seen strong execution during the quarter so far , and still execute to the plan this month. The revenue growth for the present quarter is predicted to exceed 3.5 per cent quarter-on-quarter (QoQ) in constant currency (CC), enabled by broad-based momentum across all service lines, verticals, and geographies," HCL Technologies said.
The IT major further said the earnings before interest and tax (EBIT) margin for the present quarter is predicted to be between 20.5 per cent and 21.0 per cent. Good booking momentum continues this quarter, led by life sciences & healthcare, telecom & media, and financial services verticals. The pipeline continues to seem healthy across service lines, verticals, and geographies, it said.