Fact based stock research
HCL (NSEI:HCLTECH)

INE860A01027

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

HCL stock research in summary

hcltech.com

ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), HCL (IT Consulting & oth. Services, India) shares have above-average financial characteristics compared with similar stocks. Shares of HCL are low in value (priced high) with a consolidated Value Rank of 47 (worse than 53% of alternatives) and show below-average growth (Growth Rank of 47) but are safely financed (Safety Rank of 72), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on HCL's financial characteristics. As the company HCL's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 47) and low growth (Obermatt Growth Rank of 47), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 72) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	47
Growth Rank	47
Safety Rank	72
Combined Rank	55

Country	India
Industry	IT Consulting & oth. Services
Index	BSE Sensex, Good Governace Growth Markets, Independent Boards Growth Markets, CNX Nifty 50
Size class	XX-Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: HCL

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	59	70	57	47
GROWTH
GROWTH	62	25	83	47
SAFETY
SAFETY	87	56	67	72
SENTIMENT
SENTIMENT	n/a	66	65	^new
360° VIEW
360° VIEW	n/a	51	89	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better HCL is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	59	70	57	47
GROWTH
GROWTH	62	25	83	47
SAFETY
SAFETY	87	56	67	72
COMBINED
COMBINED	85	41	87	55

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of HCL the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 47 (worse than 53% compared with alternatives), HCL shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for HCL. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 79% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 44 which means that the stock price compared with what market professionals expect for future profits is higher than 56% of comparable companies, indicating a low value concerning HCL's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 45 which means that the stock price compared with what market professionals expect for future profit levels is higher than 55% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 30 is also low. Compared with invested capital, the stock price is higher than for 70% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 47, is a hold recommendation based on HCL's stock price compared with the company's operational size and dividend yields. Should dividend investors pick HCL? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose HCL only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	36	57	48	44
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	77	65	51	45
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	16	51	32	30
DIVIDEND YIELD
DIVIDEND YIELD	84	90	87	79
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	59	70	57	47

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of HCL; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), HCL shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for HCL. Profit Growth has a rank of 53, which means that currently professionals expect the company to grow its profits more than 53% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 71 (above 71% of alternative investments). But Sales Growth has a below the median rank of 32, which means that, currently, professionals expect the company to grow less than 68% of its competitors, and Capital Growth also has a lower rank of 41. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for HCL. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	44	27	47	32
PROFIT GROWTH
PROFIT GROWTH	33	40	37	53
CAPITAL GROWTH
CAPITAL GROWTH	n/a	52	78	41
STOCK RETURNS
STOCK RETURNS	82	61	87	71
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	62	25	83	47

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of HCL.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 72 (better than 72% compared with alternatives), the company HCL has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of HCL is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for HCL. Leverage is at a rank of 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors. Liquidity is also good at a rank of 86, meaning the company generates more profit to service its debt than 86% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 43, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 57% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 72 (better than 72% compared with alternatives), HCL has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for HCL. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with HCL and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	48	58	64	64
REFINANCING
REFINANCING	54	46	42	43
LIQUIDITY
LIQUIDITY	97	71	76	86
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	87	56	67	72

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of HCL and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	3	41	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	98	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	86	82	^new
MARKET PULSE
MARKET PULSE	n/a	45	43	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	66	65	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for HCL.
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